“The Black Tax”: How America stole $275B from African-Americans

In a recent interview, I had the opportunity to delve deeper into the findings and insights presented in Andrew W. Kahrl’s eye-opening book, “The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America.” Kahrl uncovers the deeply rooted inequities in the American tax system and their devastating impact on African American communities. Through meticulous research and compelling narratives, Kahrl reveals a history of systemic overtaxation and discriminatory practices that have stripped Black Americans of their wealth and property, perpetuating the racial wealth gap that persists today. 

Kahrl’s journey into this largely unexplored topic began with a serendipitous discovery of a 1920s case in which the local tax assessor deliberately overtaxed an African American community in a Jim Crow county in the South. This case highlighted the use of state power to exploit African Americans through taxation, and Kahrl was surprised by the lack of scholarly attention given to this issue despite its clear connection to racial oppression.

The financial toll of overtaxation on Black Americans has been staggering. Kahrl conservatively estimates that it has cost the community over $275 billion, based on current data showing that Black and brown neighborhoods are over-assessed by 10-12% compared to white neighborhoods of similar property value. This translates to an additional $100 in annual property taxes for every Black American homeowner today, a burden that has persisted since the end of Reconstruction and has consistently disadvantaged African Americans, regardless of whether they own or rent their homes.

Kahrl’s book traces the evolution of this injustice from the overt, bureaucratic racism of the Jim Crow era to the more insidious structural inequality embedded in modern tax systems. He points out that property taxes in the U.S. are almost universally regressive, meaning that lower-value properties are taxed at higher rates than higher-value properties. This disproportionately affects African American homeowners, whose properties are often undervalued due to racial biases in the housing market, resulting in a regressive tax system that widens economic disparities.

Throughout the book, Kahrl unearths numerous historical injustices, such as the case of Edmondson, Arkansas, where an all-Black town was stripped of its land through a fraudulent tax scheme in the 1930s. He also highlights the persistence of discriminatory taxation practices even after the Civil Rights Movement, as exemplified by the 1967 case in Edwards, Mississippi, where Black homeowners were subjected to doubled tax assessments as retaliation for a boycott.

Kahrl also delves into the anti-tax revolts of the 1970s, which initially began as a movement for tax equity among working-class Black and brown communities suffering from overtaxation. However, these revolts were co-opted by right-wing interests, leading to policies like Proposition 13 in California, which decimated local budgets while preserving tax advantages for the wealthy and white areas. Prop 13 instituted an acquisition-based assessment process, where properties were only reassessed at their actual value when sold, inherently advantaging wealthier homeowners and white communities where property values were rising the fastest.

While some policymakers and local governments have begun addressing these inequities, Kahrl emphasizes the need for systemic change at the national level, including potential reforms like a universal home tax exemption and a federal wealth tax to redistribute resources more equitably. He also touches on the broader implications of these tax inequities, including their role in perpetuating segregation and inequality in public services.

Kahrl suggests looking at international models for potential solutions, such as federal fiscal equity programs in Germany, Canada, India, and Australia, which ensure more equitable funding at the local level. He also highlights grassroots efforts like Black Land Services, an organization founded in the 1960s to combat land loss among African Americans in the South Carolina Sea Islands by educating landowners about their rights and helping them navigate complex legal and tax systems.

“The Black Tax” is a powerful and deeply human narrative that sheds light on the hidden mechanisms of racial and economic injustice embedded in America’s tax system. Kahrl’s work not only brings to light a painful history but also issues a clarion call for a national dialogue and structural reforms to address these persistent inequities. As Kahrl prepares to discuss his book in Milwaukee on May 20, his insights provide a vital foundation for understanding and combating the extreme economic disadvantages that continue to burden African American households.