Reader Bill Boecklen sent me this CNN Business article with a headline and content that, it appears, exist only to stoke the flames of animus between black and white people in America. Or so Bill thought (I give his quote at the bottom), and I think he’s right. Read it for yourself by clicking on the headline:
The headline clearly implies some kind of racism or bias in the tax code that penalizes black people more than whites. In other words, income taxes are structurally racist. (The end of the article implies that as well.)
But in fact that’s not a scintilla of racism involved, structural or otherwise. The higher on-average taxes levied on married black couples than on married white couples result purely from their differences in work situations. Remember, race is not specified or requested on your income tax forms.
So what is causing the difference here? To use the condescending trope we see above: “Here’s what”:
First to reiterate absence of any racism (my bolding throughout):
Generally speaking, when US tax filers of any race get married, they can get hit with either a “marriage penalty” or a “marriage bonus,” meaning they pay more or less in taxes as a married couple than they would as two singles.
Penalties are more likely when both spouses in a couple work than among one-earner couples. And they are higher when two spouses each make about the same amount of money. Penalties are also more likely when a couple has children.
If the financial facts of a Black married couple were identical to those of a White married couple, there would be no difference in their tax burdens, said William Gale, co-director of the Tax Policy Center and a coauthor of its marriage study.
But here’s the “here’s why” (my bolding):
But the economic facts of Blacks and Whites on average are different.
For example, Black married couples are more likely to live in a two-earner household; each spouse is more likely to earn about the same amount as the other; and they are more likely to have dependents.
“We find that Black couples are more likely than White couples to experience an income tax penalty from marriage and to face higher penalties. We show that these patterns arise because, controlling for income, Black spouses have more equal earnings than white spouses … and because Black couples are more likely to have dependents,” the authors of the report write.
Researchers found that among couples hit with a marriage penalty, Black couples paid less in dollars ($1,804 versus $2,091) but more as a share of their income than White couples (1.8% versus 1.4%).
When researchers specifically focused on households with adjusted gross income between $50,000 and $100,000 under the tax law in effect for 2018, they found 59% of Black couples faced a marriage penalty versus 51% of White couples. Black couples paid about $150 more on average.
Only 33% of Black couples got a marriage bonus compared to 44% of Whites, and those bonuses were roughly $170 smaller on average.
Note first that there is no racism going on here; the government decided that there would be a marriage penalty and it would be higher with more equality of income among spouses. Note as well that the average tax difference is small—$150 in penalties or $170 in bonuses—a relative pittance and nothing to get worked up about.
Now I’m no tax expert, so I don’t know why the government decided to levy a higher penalty for married couples having more equal incomes (readers?). But what I do know is that this small difference in taxes paid has absolutely nothing to do with racism: it is purely the result of a decision the government made a while back to produce a tax code they saw as fair for everyone. It is ridiculous to think that the government knew about income differences in black and white married couples in advance, and then wrote the tax code to penalize African Americans!
Why, then, did CNN think this story was worth publishing? Because they wanted to sell it as an example of bias that disadvantages blacks. This becomes clear when you read the end of the article, which sees this disparity in tax penalties as a racial issue. For example:
It’s still early days when it comes to detailing how tax and other federal policies affect racial equity and how differences can be cured, said Gale. “We’re maybe in the second inning. There is so much work to be done.”
And so on. . .
It’s time for people to realize that finding scents of racism everywhere, even when it does not exist, only exacerbates divisions between blacks and whites. I believe that they’ve found that antiracist bias training in schools, for example, can actually exacerbate racial animus because, by concentrating on racial differences, it can produce resentment among white people who are told they’re racist and therefore guilty.
This article instantiates a related situation: the implication of racism when it does not exist—and in this case the nonexistence is clear. To me, dividing the data by race, and finding a difference that penalizes blacks, was deemed a “story” for the paper. Had the results shown a tax penalty for whites, it would not have been printed. And I bet you can find some tax data in other areas that would give that result.
This kind of article serves not to create equality among the races, but to gin up animus between them, and to give ammunition to those like Kendi who think that every aspect of every policy in the government is either racist or antiracist, with nearly all policies falling in the former class. If a policy disadvantages blacks, it’s racist. But only in the most ludicrous construal of “racism” (i.e. Kendi’s) can you decide that a demographic difference having nothing to do with bias is an example of racism.
Bill, who called this piece to my attention, certainly was upset about it, and he sent me the following along with the link (I have his permission to use his name and his words):
This is an unctuous example of race baiting geared to generate more clicks. As such, it must be view as a callous marketing strategy designed to take advantage of the country’s (or the MSM’s) obsession with race.
The article states, “If the financial facts of a Black married couple were identical to those of a White married couple, there would be no difference in their tax burdens, said William Gale, co-director of the Tax Policy Center and a coauthor of its marriage study.”
So, what’s the problem?
All this achieves is to increase the level of animus in the country.
Yep. It’s time to start reading the media taking account of this possibility. It’s not that they deliberately want to inflame racial divisions—I am sure that’s not true—but by finding racism everywhere, they get a good story and more clicks. Stories of racism are what sells. And the click-mania of the media leads to the kind of distortion generated by this article.
“It’s not that they deliberately want to inflame racial divisions…” it’s just a byproduct of trying to attract readers/viewers attention to the adverts.
CNN’s story is foolish. As I mentioned yesterday in response to a different story:
‘It has sadly become fashionable for people and institutions to find racism everywhere which, of course, gives those people and institutions an opportunity to decry it and to claim morality points.”
But, as Jerry and reader Bill say, it could be worse than simply racking up self-serving morality points. In magnifying a non-existent or trivial “harm” in the tax code CNN could be doing real harm. Must have been a slow news day.
This article illustrates something more than clickbait: it is imitation of the academic world, in which arcane examples of disparate impact can be presented as “research”. At my institution, researchers in urban studies discovered that black majority neighborhoods had fewer trees on average than white majority neighborhoods (not controlling for economics), which was taken as demonstrating arboreal racism. The remedy, of course, would be the installation of a DEI bureacracy in the relevant municipal government offices—although, unaccountably, there was no proposal that trees submit their own Diversity Statements.
Several months ago, Salon published a piece entitled “Systemic Racism Blunts the Diversity of Urban Wildlife” by Troy Farah, citing a study by two researchers at the University of Manitoba.
I enjoy reading the rational approach to the topics found on WEIT. This post seems to miss the mark though. The article being critiqued simply states a fact: the tax code as is has a differential effect. [BTW, where’s the usual, click-the-banner-to-read-the-original-article?]
Saying that the article exists only to gin up animus is appears to be an addition here, not evidenced in the article. This sentence is offered as evidence: `It’s still early days when it comes to detailing how tax and other federal policies affect racial equity and how differences can be cured, said Gale. “We’re maybe in the second inning. There is so much work to be done.”` I read that as another simple statement of fact. There’s more studies to be done to see if there’s really an issue here and how to address it.
It’s like pointing out that on average adult men and women have different heights. Stating the fact isn’t an automatic imputation of the speaker as a gender activist. One of the lessons I learned in grad school is that it’s one thing to state even a simple fact that seems obvious; we still need scientists to study and validate even apparently simple facts. I once said to my advisor about a study, “Isn’t that obvious?” He said, “You have an opinion; they have data.”
We expect scientists to uncover and justify facts. We shouldn’t impugn their motives when they do. Indeed, we need to make an effort to recognize that scientific papers or economic studies, when well-written, may appear strangely without bias in our polarized media environment.
So the fact is that the tax code has a differential effect by race in this instance. That’s likely unintended. It may be entirely by lifestyle choices that difference people are entirely justified to make. Or maybe not. Seems worth figuring out, no? Can it be fixed without negative impacts elsewhere? These are good questions to debate, a debate that’s now possible because these economists have provided some evidence to justify a reasonable conversation.
The effect is tiny; journalists are clearly not scientists, and they wouldn’t have published the article unless if it showed a disadvantage for whites. If you’re implying I left out the click to the headline thing on purpose, that’s not true; I simply forgot to add it and it’s now there. Until the demographics and maritabl habits of every group are identical, there will always be tax disparities.
This “fact” is the result of a White House directive to promote “equity” in government agencies. The currently politically popular and relevant context is that the finding of a disparity is an inequity. They are literally p-hacking tax databases looking for inequities to solve. They locked into a disparity of about .40 cents per day, and CNN is amplifying this “fact”.
Does this not appear nutty to you?
The CNN article was a summary of a report issued by the Tax Policy Institute, a private think tank. The White House had nothing to do with it! Moreover, the chances of the tax laws to be changed in regard to the marriage penalty to reflect “equity” anytime soon is zero. Changes in tax laws come from Congress, not the White House. This brouhaha is a one day story that will and should be quickly forgotten.
https://www.taxpolicycenter.org/publications/racial-disparities-income-tax-treatment-marriage
Prof. Coyne is correct here. $150 difference between black and white married couples compared to the average annual household income for blacks in 2018, the year of this study, which was $41,511 amounts to just 0.36%. I can’t imagine that the stats collected here could support an error margin of less than 0.4% which would mean there IS no measurable difference. What utter banality and still, the self-appointed virtuous signal.
1) It’s like pointing out that on average adult men and women have different heights. Stating the fact isn’t an automatic imputation of the speaker as a gender activist.
2)…how tax and other federal policies affect racial equity and how differences can be cured, said Gale. [My emphasis]
If Gale is just stating a fact, why use a normative word such as ‘cured’? It assumes something unhealthy in Federal tax policy which needs to be ‘fixed’ – your word from your last paragraph.
So the fact is that the tax code has a differential effect by race in this instance. Sort of, sort of not. When black and white married incomes are the same pattern., there is no racial effect. The difference is a statistical artifact arising from extraneous income patterns, not from race.
One might just as well accuse the NBA of racism because 73% of its players are black, and demand that this racial anomaly be ‘cured’.
If this is a “group” issue at all, its a sex equality issue. One might disagree with the age old policy to give tax breaks to couples where one spouse (usually the wife) earns far less than the other, thus incentivizing the housewife model of family organization. (I used to disagree strongly with this policy in Germany, but no longer do). MInimal differences in impacts according to race/ethnicity as reported in the article are a side issue, and not a particularly relevant one unless “disparate impact by white vs black race” is the overarching societal benchmark against which everything is measured. I am sure there is disparate impact among all sorts of ethnocultural groups here as with most social indicators (including within different groups of “whites” too), but they looked for only one such differential.
As a reader,
This “marriage bonus/penalty” flows from the progressive tax system of escalating marginal tax rates that we all love.
If a tax authority allows (or requires) married couples to file joint returns, typically all (or some of) their income is lumped together and averaged out to compute the marginal rate of tax due on the combined income as if it were earned by each. If all the income is earned by one spouse, he will, by splitting it with his spouse, cause half of it to be taxed at the same rate as if each of them earned half the income. In a flat-rate tax system, this wouldn’t matter, but in progressive taxation it does, very much.
E.g., a man earns taxable income of $200,000 a year and his wife nothing. He would pay 54% on the top $10,000 or so of income in Canada. If Canada allowed the couple to file jointly with perfect income splitting, each would declare $100,000 and both would pay about 40% on their top $50,000 or so, and none of the income would attract 54%.
In addition, if she doesn’t earn income in her own hands (before income-splitting at the time of filing), he will get a tax deduction for her as a dependent. If they weren’t legally married in their state of residence, the tax filer couldn’t claim a deduction for a non-working cohabitant.
I don’t know the exact amount of income that can be split this way under the U.S. Tax Code but as long as it is not zero, there is a marriage benefit for spouses with unequal incomes. If the spouses already have equal incomes in their own hands, they are already enjoying the maximum benefits of marital income splitting. If the income is modest, the loss of the spousal dependency deduction imposed by the wife’s income could entail a net penalty for being married. My father didn’t want my mother to go back to work when we kids started to grow up because the loss of the spousal deduction, plus the tax she would pay on her salary would have made us worse off, he said. And this was without income splitting. That’s why schoolteachers usually quit when they got married. They were worth more as deductions than as labourers. But Mum went back to work anyway and eventually got a graduate degree.
Of course, the larger the incomes involved, particularly when one spouse earns much more than the other, the larger the dollar amount of the marriage bonus, progressive taxation being what it is. This makes the system look biased against blacks, who earn, on average, less than non-blacks, and therefore pay less tax to begin with.
Married taxpayers in Canada file individual returns in all cases, just as if they were single. Income splitting by Canadian couples is strictly forbidden by our attribution rules except for a few sharply defined circumstances intended to encourage business investment and to reduce the tax bite on pensioners where only the husband has a pension, from being the only one who worked for money and accumulated benefits. Advocates for the sanctity of marriage have been pushing for joint returns for decades but the government isn’t stupid.
And what about mixed race couples? Are they targeted or not in that narrative?
“But in fact that’s not a scintilla of racism involved, structural or otherwise. ”
Some CNN readers might agree – then the term “woke” would make sense to such readers, as in “stay woke”, or be vigilant, on the lookout for racism.
“The higher on-average taxes levied on married black couples than on married white couples result purely from their differences in work situations.”
You fell for it.
The author was trying to insinuate that black couples are taxed more heavily than white couples, and that isn’t true. White couples have higher incomes than black couples, and are consequently taxed more heavily.
The claim being made here is very specific. It’s not that black people pay more in taxes than white people. It’s not that black couples pay a higher tax rate than white couples. It’s not that, controlling for income, black couples pay more in taxes than white couples. It’s that the marriage benefit, i.e. the tax savings realized by a couple filing together relative to what they would hypothetically pay if they were single and filing separately, is on average slightly less for black couples.
There wasn’t really a decision to tax couples with similar incomes more heavily. The tax bracket thresholds are higher for married couples, because the income needs to support two adults rather than one. However, historically they have not been twice as high. For example, in 2016 the 28% bracket started at $91,151 for single people and $151,901 for married couples. This was done not to penalize two-earner couples, but rather as an acknowledgement of the fact that two single people maintaining separate households tend to have greater expenses than a married couple living together.
As a side effect of this, though, there was sometimes a “marriage penalty,” where a two-earner household with relatively similar earnings might pay a higher tax bill than if they weren’t married and could file individually as single individuals (“married, filing separately” is an option, but it doesn’t eliminate the marriage penalty because this doesn’t let you use single bracket thresholds).
The federal income tax marriage penalty was largely eliminated in 2017, when the thresholds for married couples for all brackets except the top 37% bracket were set to precisely double the thresholds for single filers. Now if two people each making $400k per year get married, they pay an extra 2% on the last $150k of joint income that they would not have to pay if they were single.
So I have no idea what they’re talking about. This is really a very marginal issue even for very high-earning couples, and a non-issue for 99%. I’m not a tax accountant, so I could be missing some complications, e.g. for investment income.
I missed an obvious difference: Social Security taxes. A couple with one earner making $300k will pay about half as much in Social Security taxes as a couple with two earners each making $150k, because the Social Security tax cap is per-earner, not per-household.
The discrepancy in taxes , no matter how tiny or whether intentional or not, is the racism…..a la Kendi.
It is like this for everything now….as in the reason SAT scores are called racist is because almost every group outscores blacks…..especially Asians, but in today’s world, when Asian do that, they are under the spell of “multiracial whiteness”. So white.
This story is an example of cherry picking. If you have the scenario “people in circumstance A pay more tax than people in circumstance B”, then, to make a racism story, all you have to do is choose A and B so that white people are more likely to be in B and black people are more likely to be in A.
I’m sure you can find several ways to pick A and B so that the tax system appears to be biased against white people.
One obvious way is that white and Asian people pay far more tax per capita than black people in the first place—a handful of professional entertainers notwithstanding—and much of that tax revenue goes to employ black people directly in the civil service under affirmative action and to pay for free services consumed disproportionately by black people or made necessary by their higher criminality.