WEBVTT - Tax Code’s Race Bias Runs Deep 0:00:00.040 --> 0:00:03.239 I'm Carol Masser and I'm Tim Stantovik the cover this week. 0:00:03.480 --> 0:00:06.760 When Dorothy Brown, a tax lawyer at Emory University, first 0:00:06.760 --> 0:00:08.959 discovered the U. S tax code, she assumed it was 0:00:09.000 --> 0:00:12.160 a universe governed by intricate rules where race wouldn't matter 0:00:12.480 --> 0:00:15.240 in tax law. She thought the only color that mattered 0:00:15.360 --> 0:00:17.800 was green. Well, in the years since, she has come 0:00:17.800 --> 0:00:20.279 to believe the opposite, that while U. S tax laws 0:00:20.320 --> 0:00:23.640 may appear to be color blind, they still discriminate against 0:00:23.640 --> 0:00:26.720 Black Americans. In her forthcoming book, The Whiteness of Wealth, 0:00:26.840 --> 0:00:30.400 Brown argues that generations of lawmakers have optimized the system 0:00:30.440 --> 0:00:33.000 for white people, with the result that, in the US 0:00:33.080 --> 0:00:36.280 is supposedly progressive, in race neutral tax code, black people 0:00:36.360 --> 0:00:39.280 end up paying more than white people with the same incomes. 0:00:39.400 --> 0:00:41.680 So does all this mean the writers of these tax 0:00:41.760 --> 0:00:45.080 laws were racist? The question of intent is really irrelevant. 0:00:45.080 --> 0:00:48.800 According to Brown, It's hurting Black Americans, whether Congress meant 0:00:48.840 --> 0:00:52.920 it to or not. That's what she says. Tax code 0:00:53.040 --> 0:00:58.000 so white. Dorothy Brown has spent her career documenting racism 0:00:58.080 --> 0:01:03.000 in a tax system that's supposedly color blind. By Ben Steverman. 0:01:04.080 --> 0:01:07.160 Growing up in the Bronx during the nineteen sixties and seventies, 0:01:07.560 --> 0:01:12.680 Dorothy Brown couldn't escape racism. It was all around her father, James, 0:01:12.680 --> 0:01:16.399 a plumber, being barred from joining the local union, her 0:01:16.440 --> 0:01:20.760 mother Dottie, having to battle prejudice teachers, including one who 0:01:20.760 --> 0:01:24.360 marked down Dorothy's sister's grades so the precocious child wouldn't 0:01:24.400 --> 0:01:28.560 upstage her white classmates. Or the white cop beating a 0:01:28.600 --> 0:01:30.959 handcuffed black man in the back seat of a cruiser, 0:01:31.480 --> 0:01:34.000 something she once observed while waiting to cross the street 0:01:35.000 --> 0:01:38.000 as a teenager. Brown thought she'd found a way out, 0:01:38.319 --> 0:01:42.520 a loophole in American racism. Taking an accounting class, the 0:01:42.600 --> 0:01:45.800 self described math geek discovered the U. S. Tax code, 0:01:46.200 --> 0:01:49.440 a universe governed by intricate rules where race wouldn't matter 0:01:50.200 --> 0:01:53.120 in tax law. She thought the only color that mattered 0:01:53.200 --> 0:01:56.800 was green. The assumption carried her through an early career 0:01:56.800 --> 0:01:59.680 as a tax attorney, an investment banker, and then a 0:01:59.680 --> 0:02:05.320 political appointee and President George H. W. Bush's administration. After that, though, 0:02:05.680 --> 0:02:08.760 Brown spent a quarter century trying to prove the opposite, 0:02:09.360 --> 0:02:12.079 that although tax laws may appear to be color blind, 0:02:12.480 --> 0:02:17.400 they still discriminate against Black Americans. Now the ASA Griggs Scandler, 0:02:17.480 --> 0:02:21.120 Professor of Law at Emory University. Brown is preparing to 0:02:21.120 --> 0:02:23.840 publish a book that's the culmination of years of research, 0:02:24.320 --> 0:02:28.239 titled The Whiteness of Wealth, How the Tax System impoverishes 0:02:28.240 --> 0:02:32.080 Black Americans and How We can fix It. It arrives 0:02:32.120 --> 0:02:35.840 at an opportune time. After decades during which the sixty 0:02:35.840 --> 0:02:39.320 one year old Brown, says mainstream tax and policy experts 0:02:39.360 --> 0:02:43.360 either dismissed, attacked, or ignored her. Her ideas appeared to 0:02:43.400 --> 0:02:46.360 be finding an audience. People are starting to pay more 0:02:46.400 --> 0:02:48.560 attention to her work and what she's been telling us 0:02:48.639 --> 0:02:52.320 for a while, says Chia ching Huang, executive director of 0:02:52.360 --> 0:02:56.640 New York University's Tax Law Center. Last summer, after the 0:02:56.720 --> 0:03:00.519 killing of George Floyd ignited protests around the country, Browne 0:03:00.560 --> 0:03:02.960 got more calls from reporters than she had received in 0:03:03.000 --> 0:03:07.040 her entire career. By the time President Biden promised on 0:03:07.120 --> 0:03:10.600 his first day in office to identify and dismantle systemic 0:03:10.680 --> 0:03:14.960 racism perpetuated by all federal departments, staffers on Capitol Hill 0:03:15.000 --> 0:03:18.840 were already consulting Brown about the Internal Revenue Services impact 0:03:18.880 --> 0:03:22.800 on racial disparities. Suddenly, people wanted to talk about race 0:03:22.800 --> 0:03:26.959 and tax She says, with the whiteness of wealth, Brown 0:03:27.040 --> 0:03:31.040 has turned a notoriously boring topic into a surprisingly accessible 0:03:31.080 --> 0:03:34.320 and lively two hundred and eighty eight page book, relying 0:03:34.320 --> 0:03:37.920 on examples from real families, including her own, to guide 0:03:37.960 --> 0:03:41.080 readers through the intricacies of a tax code provisioned for 0:03:41.120 --> 0:03:45.320 just about every milestone in a person's life education, marriage, 0:03:45.400 --> 0:03:50.400 home ownership, child bearing, death, and inheritance. Generations of lawmakers 0:03:50.400 --> 0:03:53.960 have optimized the system for white people, she argues, with 0:03:54.040 --> 0:03:56.720 the result that in the US is supposedly progressive and 0:03:56.840 --> 0:04:00.000 race neutral tax code, black people end up paying more 0:04:00.000 --> 0:04:03.480 are than white people with the same incomes. The challenge 0:04:03.520 --> 0:04:06.160 for Brown's research has been all the greater because the 0:04:06.200 --> 0:04:08.480 I r S doesn't take race into account when it 0:04:08.520 --> 0:04:12.400 analyzes its giant trove of tax data, so she had 0:04:12.440 --> 0:04:16.400 to laboriously stitch together information from dozens of other sources 0:04:16.440 --> 0:04:19.599 to prove her book's thesis. The best evidence that the 0:04:19.640 --> 0:04:22.600 system is unfair to black people is the sheer size 0:04:22.600 --> 0:04:26.040 and persistence of the racial wealth gap. The median white 0:04:26.080 --> 0:04:29.039 family has a net worth eight times the typical black 0:04:29.040 --> 0:04:33.240 family's wealth, according to Federal Reserve figures that's the same 0:04:33.279 --> 0:04:38.560 size gap as in despite higher incomes, educational gains, and 0:04:38.640 --> 0:04:42.960 extraordinary progress by individual black people, including to the highest 0:04:43.000 --> 0:04:46.719 office in the land. The book also serves as something 0:04:46.720 --> 0:04:50.160 of a primer on how wealth works in America, showing 0:04:50.200 --> 0:04:52.920 how the rich pass assets to their children and why 0:04:52.960 --> 0:04:55.680 those starting from the bottom face such a difficult climb. 0:04:56.400 --> 0:04:59.560 Brown devotes her final chapter to advice for black readers 0:04:59.720 --> 0:05:02.600 try ring to navigate a system that disadvantages them at 0:05:02.640 --> 0:05:07.200 every turn. Black Americans need to be defensive players, she writes, 0:05:07.760 --> 0:05:11.680 choosing strategies in their educations, careers, and family lives that 0:05:11.800 --> 0:05:16.360 compensate for oppressive practices and policies. She also pushes for 0:05:16.480 --> 0:05:19.960 major tax changes to erase biases toward whites and to 0:05:20.040 --> 0:05:23.279 assist all people, especially black ones, who are trying to 0:05:23.279 --> 0:05:27.799 build wealth. Never again should politicians discuss tax reform without 0:05:27.839 --> 0:05:31.600 considering race, she says, I literally want to change how 0:05:31.600 --> 0:05:39.080 America talks about tax policy. One afternoon in the early nineties, 0:05:39.240 --> 0:05:41.479 Brown pulled out an essay she'd been looking forward to 0:05:41.520 --> 0:05:44.800 reading by her friend and mentor, Jerome Culp, the first 0:05:44.800 --> 0:05:48.160 professor of color to receive tenure at Duke university's law school. 0:05:48.960 --> 0:05:52.320 She'd been feeling isolated at her first academic job with 0:05:52.400 --> 0:05:56.159 white colleagues, who, she says, seemed clueless about race at best. 0:05:56.920 --> 0:05:59.560 And here was Culp arguing that race should no longer 0:05:59.600 --> 0:06:02.839 be over looked in important areas of the law. There 0:06:02.839 --> 0:06:05.600 may be an income tax problem that would benefit from 0:06:05.640 --> 0:06:08.240 being viewed in a black perspective, he wrote, by way 0:06:08.320 --> 0:06:11.720 of example. But until you look, how will anyone know? 0:06:12.560 --> 0:06:16.400 Brown called Culpe and promised to try. It took several 0:06:16.480 --> 0:06:19.240 years for her to publish her first research on the question, 0:06:19.600 --> 0:06:23.440 focusing on the taxation of married couples. Black Americans are 0:06:23.440 --> 0:06:26.000 more likely to be single, and if they're married, it's 0:06:26.000 --> 0:06:29.920 more likely both spouses will be working. These considerations wouldn't 0:06:29.920 --> 0:06:32.200 have mattered when the income tax made its debut in 0:06:33.640 --> 0:06:37.160 because all earners were treated the same, regardless of marital status. 0:06:37.839 --> 0:06:41.160 But in nineteen thirty, a rich white shipbuilder named Henry 0:06:41.160 --> 0:06:44.159 Seaborne persuaded the U. S. Supreme Court to lower his 0:06:44.240 --> 0:06:47.120 tax bill by imputing half his income to his wife. 0:06:47.760 --> 0:06:51.520 Congress eventually went along, and ever since, couples with only 0:06:51.560 --> 0:06:56.040 one high earner have paid less. Brown realized this policy 0:06:56.040 --> 0:06:59.480 had meant higher tax bills for her parents. The tax 0:06:59.520 --> 0:07:01.680 code is a treats a plumber and a nurse who 0:07:01.680 --> 0:07:04.839 are paying for childcare and commuting expenses with after tax 0:07:04.880 --> 0:07:07.880 dollars the same or worse than it does a banker 0:07:07.920 --> 0:07:11.640 earning their combined salaries whose spouse stays home with the kids. 0:07:12.640 --> 0:07:15.760 In the next twenty years, Brown went on to systematically 0:07:15.800 --> 0:07:19.000 catalog other ways in which when black families like her 0:07:19.000 --> 0:07:22.080 own tried to hoist themselves up the economic scale, the 0:07:22.200 --> 0:07:25.640 u S tax system pulled them down. Her colleagues, who 0:07:25.640 --> 0:07:31.240 were overwhelmingly white, expressed skepticism. However, Dorothy, everybody knows your 0:07:31.280 --> 0:07:34.000 work is irrelevant because Black people are poor and don't 0:07:34.040 --> 0:07:38.000 pay taxes, she says, one professor told her rudely, laying 0:07:38.040 --> 0:07:42.080 bare an assumption she's confronted countless times. Four fifths of 0:07:42.120 --> 0:07:46.280 black households don't fall below the poverty line. Brown's early 0:07:46.360 --> 0:07:50.000 published work cost her lots of professional grief, recalls her 0:07:50.040 --> 0:07:53.679 friend Michelle Dickerson, a law professor at the University of Texas. 0:07:53.760 --> 0:07:57.440 At Austin, people thought you were just trying to be controversial, 0:07:57.680 --> 0:08:00.840 that you're just making stuff up. Those on the left 0:08:00.960 --> 0:08:05.160 asked if this was about class, not race, Conservatives posed 0:08:05.120 --> 0:08:09.640 a different question, wouldn't these disparities disappear if black taxpayers 0:08:09.680 --> 0:08:13.480 just acted more like white ones. Brown's answer to both 0:08:13.600 --> 0:08:16.280 is that your class may change, but your race can't, 0:08:16.600 --> 0:08:20.560 no matter how differently you behave. Blacks graduate from college 0:08:20.600 --> 0:08:23.560 with more debt, do not get jobs as easily as whites, 0:08:23.920 --> 0:08:26.520 are not paid the same wages as they're equally qualified. 0:08:26.520 --> 0:08:30.120 White peers are steered toward lower paying jobs and have 0:08:30.160 --> 0:08:33.199 an unemployment rate twice that of whites, yet are more 0:08:33.320 --> 0:08:36.800 likely to provide financial support for extended family, she writes 0:08:36.840 --> 0:08:40.400 in her forthcoming book. These present day disparities are piled 0:08:40.400 --> 0:08:43.280 on top of a shameful history of Black Americans being 0:08:43.320 --> 0:08:48.280 purposely excluded from landmark federal legislation and programs for whites. 0:08:48.679 --> 0:08:52.240 There were government interventions that created a middle class, says 0:08:52.280 --> 0:08:56.360 New School economics professor Derrick Hamilton's, an adviser to Senator 0:08:56.400 --> 0:09:00.600 Bernie Sanders presidential campaign, who considers Brown on a mentor. 0:09:01.320 --> 0:09:03.880 He points to the Homestead Act in the nineteenth century 0:09:04.240 --> 0:09:05.880 and much of the New Deal and the g I 0:09:05.920 --> 0:09:09.360 Bill in when blacks were able to amass pockets of 0:09:09.360 --> 0:09:13.559 wealth it's been vulnerable to confiscation, theft, and terror. He adds, 0:09:13.960 --> 0:09:17.560 citing the devastation wrought in black neighborhoods by predatory subprime 0:09:17.640 --> 0:09:21.600 lenders as an example. Brown argues that tax policy adds 0:09:21.600 --> 0:09:25.400 insult to injury by magnifying the financial toll of blackness. 0:09:26.160 --> 0:09:29.720 The tax treatment of housing is a textbook case. Interest 0:09:29.760 --> 0:09:33.200 paid on mortgages is deductible, but there's no comparable perk 0:09:33.320 --> 0:09:38.360 for renters who are disproportionately black. Also, white homeowners tend 0:09:38.400 --> 0:09:42.040 to pocket gains upon resale, which are largely tax free. 0:09:42.480 --> 0:09:45.640 In contrast, black homeowners are very likely to lose money 0:09:45.679 --> 0:09:49.360 on their investment because homes don't usually appreciate much in 0:09:49.440 --> 0:09:53.360 diverse neighborhoods that are shunned by white buyers, and losses 0:09:53.440 --> 0:09:57.720 aren't tax deductible or consider tax incentives. The federal government 0:09:57.760 --> 0:10:00.120 offers on four oh one case and other tie to 0:10:00.240 --> 0:10:03.360 retirement savings plans, which add up to more than a 0:10:03.440 --> 0:10:07.120 quarter trillion dollars per year. According to the Tax Policy Center, 0:10:07.920 --> 0:10:10.840 only about half of US workers have a retirement account, 0:10:11.240 --> 0:10:15.480 and they're disproportionately white. Meanwhile, black people are far more 0:10:15.520 --> 0:10:17.599 likely to have jobs that fail to provide for a 0:10:17.679 --> 0:10:21.520 one case and other corporate benefits such as healthcare and 0:10:21.559 --> 0:10:25.480 flexible spending accounts that are heavily subsidized by the tax code. 0:10:25.960 --> 0:10:29.679 These discrepancies are nothing new. Brown's father, locked out of 0:10:29.720 --> 0:10:32.120 the plumbing union for the first twenty years of his career, 0:10:32.640 --> 0:10:35.280 was employed by a small private company that offered no 0:10:35.400 --> 0:10:39.440 retirement or healthcare plan. Now, though the gap between different 0:10:39.440 --> 0:10:42.439 classes of workers might be widening with the rise of 0:10:42.480 --> 0:10:47.400 the gig economy incorporations outsourcing more worked contractors, Brown is 0:10:47.440 --> 0:10:50.120 wary of the trend, seeing it as a new form 0:10:50.160 --> 0:10:55.040 of occupational segregation that's ensnaring a disproportionate number of black workers. 0:10:55.760 --> 0:10:59.080 Other factors prevent Black Americans from saving and taking full 0:10:59.080 --> 0:11:02.720 advantage of perks in the tax code to white parents 0:11:02.760 --> 0:11:05.560 and checks to their children for college tuition or the 0:11:05.600 --> 0:11:09.040 down payment for their first home. Money in black families 0:11:09.080 --> 0:11:12.280 tends to move in the other direction, meaning successful black 0:11:12.320 --> 0:11:15.200 professionals are far more likely to support parents or other 0:11:15.320 --> 0:11:19.120 family members. Problems such as these are so pervasive and 0:11:19.200 --> 0:11:22.920 stubborn that they're invulnerable to magic bullets proposed by both 0:11:22.960 --> 0:11:26.440 the left and the right. Brown says policies geared towards 0:11:26.480 --> 0:11:30.280 boosting black homeownership, for example, could channel even more Black 0:11:30.320 --> 0:11:35.520 savings into investments that ultimately prove unprofitable. Education, so often 0:11:35.559 --> 0:11:40.079 floated as the key to economic advancement, can indeed boost earnings, 0:11:40.120 --> 0:11:43.840 but it also often saddles graduates with debt. According to 0:11:43.880 --> 0:11:49.440 Federal Reserve data from black non Hispanic households had student 0:11:49.520 --> 0:11:54.839 loans compared with twenty for white non Hispanic households. Here, too, 0:11:55.000 --> 0:11:59.080 tax policy adds insult to injury. While homeowners can usually 0:11:59.080 --> 0:12:02.080 deduct all their more gug interest, student loan holders can 0:12:02.080 --> 0:12:06.680 only deduct dollars or zero if their income exceeds eighty 0:12:06.720 --> 0:12:10.520 five dollars a year. Brown is often asked, does all 0:12:10.559 --> 0:12:13.280 this mean the writers of these tax laws were racist? 0:12:13.960 --> 0:12:17.880 The question of intent is really irrelevant, She says, it's 0:12:17.920 --> 0:12:24.400 hurting Black Americans, whether Congress meant to or not. For 0:12:24.520 --> 0:12:27.880 all that Brown knows of racism, the lived and the learned, 0:12:28.280 --> 0:12:31.760 she can still find herself shocked by the damage it inflicts. 0:12:32.120 --> 0:12:36.000 One summer afternoon, she was in her three bedroom dream 0:12:36.040 --> 0:12:39.120 house on Martha's Vineyard, the island get away from many 0:12:39.120 --> 0:12:43.400 black professionals and celebrities. She was working toward her other dream, 0:12:43.440 --> 0:12:45.920 the book about the tax code she'd been contemplating for 0:12:45.920 --> 0:12:49.800 a decade, when she came across a startling statistic, six 0:12:50.400 --> 0:12:54.360 of Black Americans who start college never finish it. After 0:12:54.400 --> 0:12:57.320 seeing the number, she shut her laptop, went to the 0:12:57.360 --> 0:13:00.720 beach and stared at the ocean for a couple hours. 0:13:00.760 --> 0:13:04.000 Something about all those dreams denied and the contrast with 0:13:04.040 --> 0:13:07.480 her own experience hit her hard. This is more messed 0:13:07.520 --> 0:13:09.920 up than I even knew, and I can't take it, 0:13:10.040 --> 0:13:13.760 she thought. She almost gave up on the project. When 0:13:13.760 --> 0:13:17.360 Browne was growing up, racism was a constant. Given how 0:13:17.360 --> 0:13:20.280 banks treated black buyers, Purchasing a home would have been 0:13:20.280 --> 0:13:23.320 impossible for her family if her father hadn't gotten help 0:13:23.320 --> 0:13:27.240 from his white boss, and the children's educational advancement might 0:13:27.280 --> 0:13:30.360 have been thwarted had James and Dotty repeatedly blocked on 0:13:30.400 --> 0:13:33.199 their own career paths not been determined to give their 0:13:33.200 --> 0:13:36.560 two daughters a better future. For a while, Dorothy and 0:13:36.600 --> 0:13:40.439 her sister attended a racially diverse elementary school, where they excelled, 0:13:41.280 --> 0:13:44.520 But after Dotty learned from another parent that Dorothy's sister 0:13:44.640 --> 0:13:47.720 wasn't being graded fairly, she lied about their address and 0:13:47.760 --> 0:13:50.679 had them transferred to another school, where they found more 0:13:50.760 --> 0:13:54.720 supportive teachers. Something my mother taught us was you're no 0:13:54.840 --> 0:13:57.280 better than anyone else, and no one else is better 0:13:57.320 --> 0:14:01.320 than you. Brown says, I didn't feel racism would limit me. 0:14:01.840 --> 0:14:03.800 I knew I'd have to deal with it, but I 0:14:03.800 --> 0:14:07.840 didn't think it was hopeless. Still, she abandoned her original 0:14:07.840 --> 0:14:10.080 plan to be a civil rights attorney like her hero, 0:14:10.360 --> 0:14:13.560 Their Good Marshal. She didn't want racism to be the 0:14:13.559 --> 0:14:17.320 focus of her professional life too. It's too personal, it's 0:14:17.360 --> 0:14:21.000 too hurtful. It's too painful to hear these stories. I 0:14:21.080 --> 0:14:24.640 have enough stories. A stroke of luck helped her avoid 0:14:24.680 --> 0:14:28.800 the student debt that burdens many other black professionals. Her father, 0:14:28.920 --> 0:14:31.400 who was eventually hired as a union plumber by the 0:14:31.440 --> 0:14:35.000 New York City Housing Authority, briefly lost that job during 0:14:35.040 --> 0:14:39.200 the city's mid seventies fiscal crisis. The layoff helped Brown, 0:14:39.360 --> 0:14:42.640 who graduated from high school at sixteen, qualify for a 0:14:42.640 --> 0:14:46.040 full scholarship to Fordham University, which she could attend while 0:14:46.080 --> 0:14:49.840 living at home. A law degree from Georgetown University and 0:14:49.920 --> 0:14:52.640 a degree in tax law from n y U followed 0:14:53.240 --> 0:14:55.840 a federal clerkship led to a job at a boutique 0:14:55.880 --> 0:15:00.920 law firm that handled municipal bonds. Then she was hired 0:15:00.920 --> 0:15:04.480 away by a client, the investment bank Drexel Burnham Lambert. 0:15:05.120 --> 0:15:09.040 The famously cutthroat and aggressive firm made huge profits on 0:15:09.080 --> 0:15:11.920 the junk bond boom, and it would later collapse in 0:15:12.000 --> 0:15:16.280 scandal after the conviction of executive Michael Milkin. Brown recalls 0:15:16.320 --> 0:15:19.680 that a managing partner had this piece of advice, Dorothy, 0:15:19.840 --> 0:15:23.960 if you want loyalty by a dog. Brown moved to Washington, 0:15:24.040 --> 0:15:26.240 d c. In nineteen eighty nine to work at the 0:15:26.320 --> 0:15:29.000 U s Department of Housing and Urban Development as a 0:15:29.040 --> 0:15:34.280 political appointee in the first Bush administration. From the presidential race, 0:15:34.600 --> 0:15:37.360 she had concluded that neither party was good on race. 0:15:37.960 --> 0:15:40.840 She says she gravitated to the Republican Party because it 0:15:40.880 --> 0:15:43.720 called for shrinking the role of government, and she believed 0:15:43.720 --> 0:15:46.840 the government was one of the more racist actors out there. 0:15:47.400 --> 0:15:50.920 Her dalliance with the GOP carried on for years before 0:15:50.960 --> 0:15:54.000 she switched parties to support Barack Obama's election in two 0:15:54.000 --> 0:15:57.640 thousand and eight. Brown's first academic job was at George 0:15:57.640 --> 0:16:01.280 Mason University's right leaning law school, now named for the 0:16:01.360 --> 0:16:06.520 late Supreme Court Justice Antonin Scalia. Working on predominantly white campuses, 0:16:06.840 --> 0:16:10.080 Brown says she has dealt with disparaging comments from faculty, 0:16:10.560 --> 0:16:14.560 disrespectful students, and other instances where she felt treated differently 0:16:14.600 --> 0:16:17.880 because of her race. In two thousand and one, when 0:16:17.920 --> 0:16:20.400 she was up for a job at Washington and Lee University, 0:16:20.840 --> 0:16:24.760 a Virginia institution named for a Confederate general, she presented 0:16:24.800 --> 0:16:28.120 her work and was interrupted so many times that faculty 0:16:28.120 --> 0:16:32.840 members later apologized for their colleagues rudeness. Dorothy, you were mugged, 0:16:33.200 --> 0:16:35.720 but you managed to hang onto your purse, said one 0:16:35.760 --> 0:16:39.360 friend who was there. In past jobs, Brown says the 0:16:39.440 --> 0:16:42.160 profit motive, the fact that she could help close a 0:16:42.200 --> 0:16:45.600 deal or untangle attacks quandry had seemed to moderate her 0:16:45.600 --> 0:16:50.480 coworkers racial biases. Academia felt different, but she couldn't always 0:16:50.520 --> 0:16:52.360 be sure when the friction had something to do with 0:16:52.400 --> 0:16:55.400 her race, and if it did, when to say something, 0:16:55.440 --> 0:16:59.720 and when to bite her tongue. Brown calls this racism triage, 0:17:00.200 --> 0:17:03.400 where you reserve your energies only for the worst incidents. 0:17:04.000 --> 0:17:06.640 To cope, she relied on a small network of black 0:17:06.640 --> 0:17:10.120 women law professors at other schools, whom she'd call asking 0:17:10.480 --> 0:17:14.280 is this me? Or is this messed up? When incidents occurred, 0:17:14.600 --> 0:17:18.000 Brown pushed back, using the political and strategic savvy she'd 0:17:18.040 --> 0:17:21.159 learned in earlier jobs. It would take two rounds of 0:17:21.240 --> 0:17:24.320 voting by the Washington and Lee faculty, but she eventually 0:17:24.359 --> 0:17:27.800 got the job there, and she thrived those opposed to 0:17:27.800 --> 0:17:31.359 her out of themselves early on. She says, I didn't 0:17:31.359 --> 0:17:34.800 ever have to worry about them again. In two thousand seven, 0:17:34.960 --> 0:17:38.959 Brown jumped to Emory University in Atlanta, a more prestigious 0:17:38.960 --> 0:17:42.719 school that also had a complicated history on race. Tenure 0:17:42.760 --> 0:17:45.600 protection allowed her to push forcefully for more diversity in 0:17:45.640 --> 0:17:49.080 the law school. I'm always the woman from the South Bronx, 0:17:49.160 --> 0:17:52.280 she says. I am very direct. I don't put up 0:17:52.280 --> 0:17:54.400 with a lot. I don't really care if you don't 0:17:54.440 --> 0:17:57.919 like the tone. In twenty thirteen, Brown was recruited for 0:17:57.960 --> 0:18:01.760 a powerful job in Emery's administratation, and, though reluctant to 0:18:01.760 --> 0:18:04.520 give up her research and teaching, she served for three 0:18:04.600 --> 0:18:08.680 stressful years. In the wake of protests from students demanding, 0:18:08.720 --> 0:18:11.960 among other things, more faculty of color. She ran a 0:18:12.000 --> 0:18:14.760 fund to hire diverse faculty and set up initiatives to 0:18:14.840 --> 0:18:19.400 mentor them. Colleagues say they recognize that Brown's outspokenness can 0:18:19.440 --> 0:18:22.760 be balanced by a measured approach to important and difficult work. 0:18:23.840 --> 0:18:26.840 She may seem impatient, but she also believes in taking 0:18:26.880 --> 0:18:30.040 it one step at a time, says Claire Stirk, who 0:18:30.080 --> 0:18:33.600 recently stepped down as Emory's president. By the end, she 0:18:33.640 --> 0:18:36.080 can make an argument that becomes very hard for people 0:18:36.119 --> 0:18:43.560 to not accept. Biden's election could allow Brown to take 0:18:43.560 --> 0:18:46.920 her research to a new level. Just hours after being 0:18:46.920 --> 0:18:50.760 sworn in on January, the President signed an executive order 0:18:50.800 --> 0:18:53.880 creating a cross agency group with a mandate to address 0:18:53.920 --> 0:18:57.480 systemic racism in the U. S. Government. Their duties will 0:18:57.520 --> 0:19:00.320 include gathering data to track the effects of pol sees 0:19:00.359 --> 0:19:03.960 on disadvantaged groups. There's no reason this should remain in 0:19:04.000 --> 0:19:07.520 the dark, ages, says Brown. Strict rules should be put 0:19:07.560 --> 0:19:10.000 in place to make sure the data isn't misused. She 0:19:10.080 --> 0:19:13.720 adds she's also clear to that end that she isn't 0:19:13.720 --> 0:19:15.840 advocating for the I R S to add a race 0:19:15.960 --> 0:19:19.880 checkbox to the ten forty form. There are workarounds, such 0:19:19.880 --> 0:19:23.720 as using surveys and matching anonymized data sets with the 0:19:23.840 --> 0:19:26.919 right data and the right priorities, says Brown, The U. 0:19:27.040 --> 0:19:29.080 S could do a better job of using its tax 0:19:29.119 --> 0:19:32.960 code to help close the racial wealth gap. Other policymakers 0:19:33.000 --> 0:19:36.119 are thinking along the same lines. You've got this tool 0:19:36.160 --> 0:19:40.840 that is potentially powerful for reducing inequality, including racial disparities, 0:19:41.119 --> 0:19:44.439 says In y Ushang. One of the questions she's asking 0:19:44.600 --> 0:19:48.320 is why isn't it doing more. Brown's own reform plan 0:19:48.400 --> 0:19:51.439 would strip the tax code of exemptions and deductions that 0:19:51.560 --> 0:19:55.960 steer advantages to white Americans. All income should be taxable, 0:19:56.080 --> 0:20:00.840 she says, no more exclusions for gifts inheritances or property sales. 0:20:01.440 --> 0:20:03.920 Proceeds from investments should be taxed at the same rate 0:20:03.960 --> 0:20:08.400 as wage income, and marital status shouldn't affect taxes. There's 0:20:08.440 --> 0:20:10.600 only one deduction that she would add to the code, 0:20:11.000 --> 0:20:14.560 a living allowance deduction that would prevent or cut taxes 0:20:14.600 --> 0:20:18.440 on low earners. By requiring everyone else to pay progressive 0:20:18.440 --> 0:20:21.159 tax rates on all their sources of income. The U 0:20:21.280 --> 0:20:23.920 S could afford to lower rates and get the same revenue. 0:20:24.400 --> 0:20:27.720 The Supreme Court would probably strike down any race based 0:20:27.800 --> 0:20:30.920 tax credit introduced as a form of reparation to descendants 0:20:30.960 --> 0:20:34.639 of slaves, Brown says, so her next best choice is 0:20:34.680 --> 0:20:37.800 an annual tax credit for taxpayers whose wealth is below 0:20:37.840 --> 0:20:41.480 the US median. The credit would help all poorer Americans 0:20:41.480 --> 0:20:43.920 trying to build wealth in a country where it's gotten 0:20:43.960 --> 0:20:46.640 more difficult to move up the economic ladder on earnings 0:20:46.640 --> 0:20:50.159 from work alone, But because the typical black family has 0:20:50.200 --> 0:20:53.240 a net worth of twenty four thousand dollars compared to 0:20:53.240 --> 0:20:56.680 a median wealth of one two thousand dollars for all Americans, 0:20:57.240 --> 0:21:01.959 it would disproportionately aid Black Americans. None of Browne's favored 0:21:02.000 --> 0:21:04.760 remedies look likely to become law in a Congress where 0:21:04.800 --> 0:21:08.560 Democrats barely have a majority, but after watching attitudes toward 0:21:08.640 --> 0:21:12.640 racial justice shift last year, she's optimistic. We are well 0:21:12.680 --> 0:21:14.919 positioned to start making the kinds of demands that the 0:21:14.960 --> 0:21:18.600 wealthiest white Americans have made for decades, she says. In 0:21:18.680 --> 0:21:22.040 the meantime, Brown's new book has plenty of practical pointers 0:21:22.040 --> 0:21:25.200 for Black Americans. Take advantage of a four oh one 0:21:25.320 --> 0:21:28.000 k if you have one, If you'd rather buy a 0:21:28.000 --> 0:21:31.199 home in a diverse neighborhood, which is understandable, Try not 0:21:31.320 --> 0:21:35.040 to sink your entire nest egg into that purchase investing 0:21:35.080 --> 0:21:38.160 in stocks is likely to provide a better return despite 0:21:38.160 --> 0:21:41.199 a racist financial system that hasn't seen Black Americans as 0:21:41.240 --> 0:21:46.280 potential customers. Finally, don't despair or blame yourself for failing 0:21:46.320 --> 0:21:50.200 to get further along financially. The reality of how ordinary 0:21:50.240 --> 0:21:54.480 white Americans build wealth is hidden, leaving black families bewildered 0:21:54.520 --> 0:21:57.400 about their inability to achieve the financial security of their 0:21:57.400 --> 0:22:02.000 white peers. She writes why wealth snowballs over a lifetime. 0:22:02.520 --> 0:22:05.760 A tuition payment by dad, a job at the family business, 0:22:06.160 --> 0:22:09.720 a small inheritance from Grandma, and soon even apparently middle 0:22:09.760 --> 0:22:12.159 class young adults have amassed enough that they're able to 0:22:12.160 --> 0:22:15.359 return the favor to their children as they age. This 0:22:15.480 --> 0:22:19.280 system has been humming along for centuries. As Brown puts it, 0:22:19.680 --> 0:22:23.040 whiteness itself and the legacy of advantages that comes with 0:22:23.080 --> 0:22:26.439 it is the magnet that attracts wealth. And that's this 0:22:26.480 --> 0:22:29.399 week's cover story. It's an especial edition of Bloomberg Business 0:22:29.440 --> 0:22:32.520 Week magazine devoted to equality, looking at it from all 0:22:32.600 --> 0:22:35.040 different angles. Find more in the current issue, which is 0:22:35.080 --> 0:22:37.720 on newsstands, online at Bloomberg dot com and on the 0:22:37.720 --> 0:22:39.760 Bloomberg Terminal, and be sure too to listen to our 0:22:39.800 --> 0:22:42.399 Bloomberg Business Week radio show, Wearing Lab Monday through Friday 0:22:42.440 --> 0:22:45.080 at two pm Wall Street Time on Bloomberg Radio. Watches 0:22:45.080 --> 0:22:48.080 too on our daily broadcast on YouTube, just search Bloomberg 0:22:48.119 --> 0:22:50.719 Global News and you can also see me on Bloomberg Quicktake, 0:22:50.760 --> 0:22:53.760 available at Bloomberg dot com, slash qt and streaming platforms 0:22:53.760 --> 0:22:56.840 like Roku, Apple TV, Samsung TV and more. I'm Tim 0:22:56.880 --> 0:23:01.840 Stanabek and I'm Carol Master. This is Bloomberg. 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