Filing While Black: How Our Racially Biased Tax System Hurts All of Us
To the Editor:
Driving While Black — Blacks being stopped by authorities disproportionately, all too often with disastrous results — affects both the modest and the mighty (Sen. Tim Scott, R-S.C., reported being stopped seven times in a single year). Filing While Black — Black Americans targeted by racially biased tax enforcement — has the same devastating impact.1 Unlike Driving While Black, racial profiling that makes Filing While Black risky for so many Americans will rarely be caught on camera.
But it has been.2 However tragic, in many ways the death of Eric Garner on a Staten Island sidewalk initially appeared unremarkable.3 Garner died in police custody, but official reports mentioned nothing about the illegal choke hold that caused his death.4 A bystander’s cell phone video of the incident would ultimately go viral, offering the world an indelible image of the dangers Black Americans face in all aspects of their public and private lives. It also highlighted the risks of Filing While Black.
Garner was suspected of committing a crime. But not just any crime. Police had arrested Garner before — in the very location he died — for evading taxes.5 Cigarette taxes, like taxes on pollution and plastic bags, aim to discourage harmful activities (or at least to compel smokers and polluters to bear the costs associated with their behavior). In New York, selling individual, untaxed cigarettes is against the law. Garner died because officers believed Garner did precisely that.
Garner’s death, caught on camera, has profoundly affected how the nation talks about law enforcement. Recent backlash — including Biden’s pledge to “fund the police” and New York Gov. Kathy Hochul’s embrace of tougher bail laws — offers powerful testimony to the impact of Garner’s death on how our leaders talk about crime and punishment. Alongside the deaths of George Floyd and Breonna Taylor and countless other Black men, women, and children, Garner’s suffering fueled the rise of the Black Lives Matter movement. Change does not come quickly or easily, but his death sparked a critical conversation that even the most powerful can no longer ignore.
Remarkably, Garner’s death has had absolutely no impact on tax law. Even the most enlightened experts writing about Pigouvian taxes — the technical term for taxes like those on cigarettes — do not mention his name.6 A thoughtful scholar published an essay nearly 17,000 words long on Pigouvian taxes a little more than a year after he died. “Garner” was not one of them.
How can tax law continue to remain silent on the perils of Filing While Black? Simply put: willful blindness. In 2019 ProPublica reported that the most-audited counties in the United States boasted neither luxury condos nor yachts.7 Tax authorities instead focused their attention on spots like a “rural county in the Mississippi Delta known for its catfish farms” where “more than a third of its mostly African American residents are below the poverty line.”8
Just as experts shrugged off the grim reality that Garner died because of a Pigouvian tax, they refuse to acknowledge the role race played in drawing the attention of the IRS to those poor Black counties. Rather than prompting heightened scrutiny of the impact of race on tax enforcement, such failures become another opportunity to demand higher funding for tax authorities. IRS Commissioner Charles Rettig, for example, blamed the dangers of Filing While Black on budget cuts.9 He suggested — without irony — that a decade of efforts by Republicans to defund the tax police left them no choice but to target Blacks.10
Five former Treasury secretaries — Timothy F. Geithner, Jack Lew, Henry Paulson, Robert Rubin, and Lawrence Summers — wrote about ProPublica’s research in The New York Times, echoing Rettig’s claims about inadequate funding.11 Perversely, they selectively quoted ProPublica’s story about racial bias in tax to support their call to boost the IRS enforcement budget. (Technically, they selectively plagiarized since they appropriated its language without attribution.)
In their opinion piece, they whitewashed ProPublica’s damning observation that the “five counties with the highest audit rates are all predominantly African American, rural counties in the Deep South.”12 They wrote “audit rates of those in the top one percent have fallen most staggeringly over the course of the past decade, such that rural counties in the Deep South have some of the highest rates of examination in the country.”13 In tax law, we somehow got the backlash without the benefit of the awakening that has shaped a meaningful national conversation over policing.
In her book, The Whiteness of Wealth, Dorothy A. Brown tells the story of a tax code that deepens the wealth gap between whites and Blacks in ways both big and small. She uncovers the ways that even the most familiar tax rules — regarding marriage, education, and housing — promote inequality.14 Incredibly, the reality may be worse than what her scathing examination of tax laws reveals. Even without bias in enforcement, Brown shows that tax laws favor whites. Magnified by the risks of Filing While Black, the problems Brown identifies only grow more acute.
The Biden administration has done exactly nothing to tackle the problem of Filing While Black. A year ago, I urged President Biden to personally reach out to Professor Brown.15 Instead, eight months later his administration invited both of us to an event where it announced new minority lending efforts.16 But nothing new on race and tax.
Another year has gone by, but it’s still not too late. Scholars have shown how easy it would be for tax authorities to check for racial bias in the tax system. Jeremy Bearer-Friend has offered a clear roadmap.17 He detailed how virtually every other part of the federal government makes it possible to monitor for racial bias in all sorts of areas, from housing to healthcare to education.18 Even tax enforcement — when in the hands of the Justice Department, but not the IRS — has been scrutinized for racial bias.19 Our leaders could determine whether Garner’s death and ProPublica’s investigation represent the tip of a much larger iceberg if they chose to do so.
Treasury secretaries and IRS commissioners may remain stubbornly blind to the crisis of Filing While Black no matter what evidence they are shown. But most Americans understand that such discrimination hurts all of us. Presented with proof that we scrutinize the returns of poor Blacks more vigorously than we do those of wealthy tax cheats, they will not stand for it. But we won’t find that evidence if we don’t look for it. This Tax Day, the time has finally come for President Biden to confront the ugly reality of Filing While Black.
Steven A. Dean
Brooklyn Law School
Apr. 13, 2022
1 Steven A. Dean, “Filing While Black: The Casual Racism of the Tax Law,” Utah L. Rev. (forthcoming 2022).
2 See Al Baker, J. David Goodman, and Benjamin Mueller, “Beyond the Chokehold: The Path to Eric Garner’s Death,” The New York Times, June 13, 2015.
3 See id. (“In the hours after Mr. Garner died, an initial five-page internal report prepared for senior police commanders, known as a 49, did not refer to contact with his neck.”).
4 See id. (“The chokehold . . . was found to be a cause of Mr. Garner’s death, along with the compression of his chest by officers who helped to handcuff him.”).
5 See id. (noting that Eric Garner had been “arrested twice already that year near the same spot, in March and May, charged both times with circumventing state tax law”).
6 The year after Garner died, an article “highlight[ed] some often-overlooked weaknesses in the Pigouvian instrument,” but did not mention Garner. See Victor Fleischer, “Curb Your Enthusiasm for Pigouvian Taxes,” 68 Vand. L. Rev. 1673 (2015).
7 Paul Kiel and Hannah Fresques, “Where in the U.S. Are You Most Likely to Be Audited by the IRS?” ProPublica, Apr. 1, 2019.
9 Kiel, “IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor,” ProPublica, Oct. 2, 2019.
11 Geithner et al., “We Ran the Treasury Department. This Is How to Fix Tax Evasion,” The New York Times, June 9, 2021.
12 Kiel and Fresques, supra note 7.
13 See Geithner et al., supra note 11.
14 Brown, The Whiteness of Wealth: How the Tax System Impoverishes Black Americans—And How We Can Fix It (2021). Tax Notes also published an excellent overview of the way systemic racism affects the tax law. Francine J. Lipman, Nicholas A. Mirkay, and Palma Joy Strand, “U.S. Tax Systems Need Anti-Racist Restructuring,” Tax Notes Federal, Aug. 3, 2020, p. 855.
15 See, e.g., Dean, “A Plea to President Biden to Stop Perpetuating Racist Tax Policy,” The Nation, Apr. 13, 2021.
16 Treasury, “Secretary of the Treasury Janet L. Yellen and Vice President Kamala Harris to Announce $8.7 billion in Investments for a More Equitable Economy at 2021 Freedman’s Bank Forum” (Dec. 14, 2021).
17 Bearer-Friend, “Should the IRS Know Your Race? The Challenge of Colorblind Tax Data,” 73 Tax L. Rev. 1 (2019).
18 Id. at 2-3.
19 Bearer-Friend, “Colorblind Tax Enforcement,” 97 NYU. L. Rev. (forthcoming 2022) (“the Department of Justice collects and publicly reports on the race and ethnicity of defendants, IRS Criminal Investigations does not”).