What question did this study set out to answer?

To investigate how federal income tax outcomes differ by race, particularly between Black and White households.

May 16, 2026

Black-White Differences in Income Tax Liability

Puntos clave

To investigate how federal income tax outcomes differ by race, particularly between Black and White households.
Analyzed data from the Survey of Consumer Finances and employed NBER’s TAXSIM model.
Compared tax rates and filing statuses between Black and White households across different income groups.
Assessed the impact of historical and prospective policy changes on tax disparities.
Black households have lower tax rates than White households in low-income groups, impacted by filing status and dependents.
In high-income groups, Black households experience higher tax rates compared to Whites due to income composition differences.
The findings suggest significant policy implications regarding tax liabilities based on race.

Resumen

The federal income tax does not explicitly discriminate by race or ethnicity but can still generate disparate outcomes when a group’s activity correlates with determinants of tax liability. Using Survey of Consumer Finances data and NBER’s TAXSIM model, we find that untaxed forms of income accrue disproportionately to White households across most income levels. Black households face lower tax rates than Whites in low-income groups due to differences in filing status and dependents but face higher rates than White units in high-income groups due to differences in income composition. We also examine cross-group implications of historical and prospective policy changes.

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