Intergenerational wealth transfers compound the racial wealth gap through the cycle of tax-subsidized assets

Evidence

Put another way: Hard work alone will never enable black Americans to get the benefits that our white peers receive. We might be able to mimic white behavior—getting married and filing jointly, buying homes, trying to get our children into the best colleges—but we do not become white and benefit from the decades, or in some cases centuries, of opportunity that white Americans have enjoyed. White children receive financial support from their parents and grandparents to assist with their own wealth building through home purchases and debt-free college and/or graduate school. Tax subsidies provide an extra boost. Income from investments in the stock market—disproportionately held by white Americans—are taxed at a lower rate than ordinary wages, which enables even more savings and wealth building. Homes in overwhelmingly white neighborhoods appreciate astronomically, raising their owners’ net worth—and snagging them up to half a million dollars tax-free when they sell. The typical white adult is not making early withdrawals from their retirement accounts or supporting financially strapped relatives. When their parents and grandparents die, they inherit property tax-free. And the cycle repeats, but now with even more tax-subsidized assets that they can leave to their heirs. — Dorothy A. Brown, The Whiteness of Wealth, 504

Categorization

• XREF: Names the compounding intergenerational mechanism — inherited property tax-free, parental support — that the reader wants enumerated as an exact mechanism. — connects to: Financialization creates a bifurcated hierarchy between celebrated risk-takers and racialized at-risk victims — Max Haiven, Cultures of Financialization, 45; Asset distribution drives wealth inequality and social stratification. — Paul Langley, Assets and Assetization in…, 8; Clustering of multiple capital forms entrenches status inequality across generations. — W. David Marx, Status and Culture: How Our Desire for…, 90