The Black Tax: How Property Taxes Perpetuate Inequality

Unmasking the Racist History of Property Taxes

Property taxes, the financial bedrock of local governments, often carry a hidden burden. A new book, "The Black Tax: 150 Years of Theft, Exploitation, and Dispossession in America," unveils a disturbing narrative of how these taxes have disproportionately harmed Black homeowners for over a century and a half.

Author Andrew Kahrl, a professor of history and African American studies at the University of Virginia, argues that the seemingly neutral property tax has been weaponized to reinforce racial hierarchies and exacerbate wealth disparities. This deep dive into the history of property taxes reveals a bottom-up perspective, focusing on the lived experiences of Black taxpayers rather than just policy formulation.

Beyond a "Good Tax": The Regressive Reality

The often-touted notion that “an old tax is a good tax” rings hollow when examining the property tax’s impact on marginalized communities. While theoretically a progressive wealth tax, in practice, it falls hardest on those least able to pay. Lower-valued properties, often concentrated in Black neighborhoods, are taxed at effectively higher rates, making the property tax regressive and, functionally, racist.

Kahrl points out the significant power wielded by local tax administrators, who historically operated with minimal oversight, leaving the system vulnerable to manipulation and bias. This lack of accountability, coupled with systemic devaluation of Black-owned property, has resulted in a heavier tax burden on Black communities.

Predatory Practices: The Tax Lien Industry

One of the most distressing aspects of the property tax system is the tax lien process. When property taxes go unpaid, liens are often sold to private investors who can then charge exorbitant interest rates and fees. This practice can quickly turn a small tax debt into an insurmountable financial burden, ultimately leading to dispossession, particularly in Black communities.

This predatory system, Kahrl argues, has significantly contributed to the drastic decline in Black land ownership over the 20th century, eroding a vital foundation of Black political power and economic stability.

Fiscal Citizenship Denied: Erasure and Exclusion

Kahrl’s research reveals a deliberate effort to erase Black individuals as fiscal citizens during the Jim Crow era. The false narrative that Black people paid little in taxes was used to justify the denial of essential public services, from education and infrastructure to basic utilities.

"From the moment Black people began making claims on the state, whites in power have responded by peddling the canard that Blacks paid little in taxes and by implication were undeserving of the rights, benefits, and protections of citizenship.” - Andrew Kahrl

Black communities actively challenged this lie, highlighting their tax contributions and demonstrating how they were, in fact, subsidizing white services. Yet, discriminatory practices persisted, further solidifying the racial divide.

A Journey Through Systemic Inequality

Kahrl’s book chronicles the evolution of this discriminatory system, from the post-Civil War South to the Great Migration North, through the Civil Rights Era and the tax revolts of the 1970s. Each period reveals how the property tax, combined with other discriminatory policies, has systematically undermined Black economic progress.

A Trap Even with Black Leadership

Even the rise of Black political leadership in many cities did not solve the inherent problems within the property tax system. The fragmented nature of local governance, coupled with white flight and the erosion of urban tax bases, left Black mayors and officials with limited tools to address the deep-seated inequalities.

Finding a Way Out: Toward a More Equitable Future

Kahrl offers potential solutions, advocating for policies like circuit breakers that cap property taxes based on income and reforms to the tax lien system to protect vulnerable homeowners. He also stresses the importance of reducing localities’ reliance on property taxes, particularly for funding education, and shifting toward more equitable funding models at the federal level.

Ultimately, Kahrl's work serves as a call to action, urging us to pay closer attention to the often-overlooked powers of local government and to advocate for a more just and equitable tax system.

“Politics matters, especially at the local level, and it matters for individual voters. And in very specific financial terms, it matters.” - Joseph J. Thorndike, Tax Notes Historian