Black-White Differences in Income Tax Liability

Key Points

• 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.

Abstract