This journal article was first published in the Pittsburgh Tax Review, where the full text can be found.
Economists have found that discrimination and economic exclusion have contributed to significant wealth gaps between low- and high-wealth households. This wealth gap is among the most significant and persistent between white and Black households. The continued growth of these gaps stems at least partly from tax policies that advantage high-wealth households relative to all other households. Tax policies that contribute to wealth inequality, include but are not limited to corporate and income tax rate cuts, preferential tax treatment of capital gains compared to wage income, and the weakening of estate taxes. These tax policies and the consequential wealth gaps disproportionately benefit a very small number of mostly white and male individuals, while harming many low- and moderate-income people of all races. Black women in particular have and continue to suffer significant economic harm from these policies.
As a result of tax and other policies, Black women are the most underpaid, financially insecure, and low-wealth group across all races. Given their financial status the “Black Women Best” (BWB) framework provides a system to monitor the health of the economy focusing on the experiences of Black women. The approach posits that if policies improve the economic wellbeing of Black women, they will benefit the broader economic health of the rest of the population. This Essay uses the BWB framework and data from the Survey of Consumer Finances to examine the current state of the racial wealth divide centering on inherited wealth. It explores how wealth disparities affect low- and moderate-income households in general and Black women in particular, focusing on the role of inheritances over time. This focus on inheritances provides essential context for understanding the wealth gap.
Building on this foundation, the Essay further investigates the influence of tax policies on inheritance practices, particularly highlighting their contribution to patterns in estate transfers among white households. The Essay concludes by discussing how the application of the BWB framework can inform deliberations regarding federal and state estate and inheritance taxes. The economic consequences of these taxes for Black women exposes the potential effects on the racial wealth gap as well as on other adverse economic outcomes for low-income households and communities of color. By incorporating evaluation methods that account for both race and gender, policymakers may better design initiatives to promote progress. The BWB framework is a valuable approach for assessing such reforms, emphasizing the importance of focusing on economic advancement for Black women as a critical measure of equity for all.
