“The new president wants the rich to pay much more in taxes, in order to finance a $1.8 trillion plan to invest in things like child care, education, and tax cuts for the poor that are meant to reduce inequality.
But standing in the other corner of the ring is a sophisticated wealth management and accounting industry that is ready to fight, eager to temper every aggressive proposal and exploit every loophole to please their clients who pay them big bucks to defend every dollar.
Over the next few months — and over the next few years, if Biden’s plan manages to pass in some form or another — these forces will collide. Passing the tax bill is only the first step. The execution could be harder. No matter Democrats’ intentions, they may find that their plan lets tech billionaires off the hook.
And so the wealth management industry is brimming with a cocksure optimism that they can outsmart the bureaucracy.”
“The median Black household has a net worth of only $24,100, a fraction of the $188,200 in net worth the median white household has, 2019 Federal Reserve data shows.
And these numbers don’t always show the nuance of financial instability for many Black families. A quarter of Black households have zero or negative net worth, compared with a tenth of white families, according to the Economic Policy Institute.
The reasons for the wealth gap are complicated and multi-layered, with racism, historical injustices, structural inequality, and educational disparities all playing a huge role. So do career choices, marriage status, and inheritance levels for Black people, which are starkly lower than for white people. The practice of redlining, for example, under which the government would not guarantee loans for Black Americans who were trying to purchase homes, as well as the effect of mass incarceration on Black representation in the workforce, are just a couple of examples of how African Americans are systematically prevented from building wealth.
Consequently, here’s the harsh reality about being Black in America: The deck is often so stacked against you that the weight of it all can feel overwhelming — no matter your income, your net worth, or how much you’ve achieved. For African Americans like me, systemic inequities and generations of poverty can make it seem like whatever you’ve done is never enough, especially when you know you’ll have to help support relatives or make contingency plans for any number of scenarios out of your control.
The reality is that for those of us able to generate wealth and reach a level of comfort, we are often also financially supporting family members or paying down debt. We simply don’t have that generational wealth that so many white families have to fall back on and start out their adult lives with. Even two people earning the same income can be looking at totally different financial situations based on their race and class: One could be putting money into savings or investing, while the other might be using that same income to pay a family member’s rent or help support an aging parent’s retirement.
I know that people like my mother don’t have any real safety net other than relatives. There’s no inheritance coming. As a result, for far too many Black people, low income and low wealth translate into a lifetime of scraping by.”
“Among Black Americans, it’s not uncommon for those who can to help family members financially: Some call it the “Black tax,” a term commonly used in South Africa that refers to the obligations of first-in-the-family college graduates, professionals, or others who “make it” to assist their family members.
I’m happy to help out my mother by covering her needs when she’s short on cash. But it can be an emotional experience for her to even ask”