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Tax Policy Is a Part of the Black American Story

Policymakers can only make sensible decisions when they understand what the tax system’s shortcomings have done to Black communities.

A sign reading "Stop Sugarcoating American History" sits at the feet of demonstrators in a March against racism on Juneteenth, June 19, 2020 from John L Kelly Field to the Milton High School in Milton, MA,Blake Nissen for The Boston Globe via Getty Images

Juneteenth is a reminder of the hard-fought victories that helped Black Americans secure their delayed freedom, justice, and suffrage. And in the chapters about tax policy, the tales are no less fraught. From America’s prologue to the last paragraph of the Civil War, governments raised more tax revenue from the taxation of Black bodies than any other source.

Though Black Americans are no longer taxed as property, their relationship with the property tax system remains challenging. Today, for instance, Black families pay more property taxes than white Americans who own comparable properties. Black people went from being literally taxed as property to being slighted by the property tax system – perpetuating deep economic inequality for a group of people who have always suffered on the soil of this land.

The good news is that progress has been made. Genuine tax equity is not only possible, but it’s within reach.

The civil rights battles of the past 70 years showed how Black leaders and lawmakers can work together to achieve progress in housing, voting, education, jobs, health care, and taxes to redress racial harms. The time is now for policymakers to continue the march toward a more equitable tax code for Black households.

Understanding what led us to this point means acknowledging the brutalization of Black Americans through slavery. This inhumane institution included the taxation of Black people as property. This was no minor issue. Slave taxes were a massive revenue source that paid for public investments that benefited white slaveholders and non-slaveholders alike. For example, these taxes financed the Louisiana Purchase which resulted in material and economic gain that built the foundation for the racial wealth gap we see today.

The conclusion of the Civil War chapter and the abolition of slavery ended the taxation of Black men, women, and children as property. It also ushered in overdue civil rights for Black people in America. This was a jubilant section of the American story. Legislatures in some states raised property taxes to invest in public education and other programs to help formerly enslaved Black Americans get acclimated to the economy they built for free.

The excitement did not last long.

Ultimately, the Reconstruction chapter continued tax injustices against Black people in other forms, especially against Black elected officials. In 1875, Alabama created a new constitution that placed tight property tax limits still in place today. Tax limits make it more difficult to adequately fund high-quality services that heavily depend on property taxes, like schools, roads, and firefighters.

At the turn of the century, a new part of the story began to unfold. On the tax front, this often took the form of blatantly discriminatory property tax assessments. White policymakers — particularly in Mississippi — used highly restrictive property tax limits and supermajority requirements to weaken school funding in Black communities, disempower Black residents, and shift the tax base to more inequitable revenue policies like sales taxes. Mississippi shifted its tax base from white property owners to poorer Black households in 1932 through the advent of the modern sales tax. Black people, with substantially less income, kept paying just as much as their white counterparts, if not more, and contributed significantly toward funding white-only schools while their own schools deteriorated.

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In the years that followed, exclusionary housing policies bolstered white wealth while locking many Black families out of homeownership. The impact of those policies is still felt today. Predominantly white neighborhoods can generally make larger investments in public services like education and transportation, because they have larger revenue bases with higher home values, while Black people are overrepresented in under-resourced communities.

Today, as home prices continue to rise, an unbalanced property tax system hinders Black households’ means of accumulating wealth. Black families in gentrifying areas that do not offer income-based property tax solutions struggle to afford their tax bills while Black renters, who pay property taxes indirectly, cannot even save enough for a down payment. Against this backdrop, a staggering racial homeownership gap persists.

Reforming property taxes, a vital source of funding for state and local government, can advance tax justice for Black renters and homeowners and reverse some of the damage of the past four centuries. Property taxes vary widely, so lawmakers at the state and local level must bring Black community leaders and advocates to the table and discuss ways to fix these policies that acutely affect Black renters and homeowners.

Policymakers can only make sensible decisions when they understand what the property tax system’s shortcomings have done to Black communities. Having inclusive conversations can reveal fundamental problems like inaccurate assessments, discriminatory appeals procedures, and a lack of consideration of ability to pay in setting property tax bills. Focusing on these issues would allow legislators and community advocates to reimagine a property tax system that does not exacerbate racial inequities.

At the same time, it is important to avoid backsliding. Lately, too many policymakers are promoting old ideas that are detrimental to Black people like pairing property tax cuts with sales tax increases or establishing firm property tax limits – policies that will do nothing to advance the position of Black Americans and may actually roll back some of the modest progress seen in recent years.

Instead, policymakers should adopt antiracist and practical appraisal practices, use robust property tax circuit breaker programs, and implement and monitor fairer appeals practices to fix these ongoing issues.

Slavery remains America’s greatest sin and the tax policy stemming from it undermined Black people’s attempts to climb out of poverty, build wealth, and become truly free. Lawmakers cannot undo the past, but they can surely learn from it.

A key philosophy behind the American story is justice. Lawmakers must use that ethos for Black taxpayers in this latest section of the narrative. Juneteenth provides us with a chance to reflect on this history and begin writing a new chapter toward tax and racial justice.


Institute on Taxation and Economic Policy
Brakeyshia Samms is the state policy analyst for the Institute on Taxation and Economic Policy. Samms researches and writes about tax policies to inform the public and supports advocates and policymakers with analyses to help secure equitable tax policies, sound fiscal practices, and policy solutions that remedy historical injustice.