The Fiscal Cliff Tax Deal & African Americans
4 months ago
With widening wealth disparity, blacks hit harder by unexpected tax increase
President Obama and Democrats...oh, and Republicans...have done it! The so-called fiscal cliff was averted, and the wealthiest Americans will pay more taxes this year on their hefty incomes.
But tax increases are still on the horizon for an estimated 77 percent of middle class and poor American workers, according to number crunching by the nonpartisan Tax Policy Center. The measure temporarily lowering the Social Security payroll taxes has expired, meaning lots of workers will see less of their money each month. And, with financial disparities between black and whites widening quickly over the last several years, African Americans will feel a tighter squeeze on their wallets than whites.
It’s no secret that wealth gap between whites, blacks and Hispanics is at record highs – the median net worth for white households in 2009 is 20 times that of black households, according to a 2011 Pew Research Center's Social and Demographic Trends report. Whites had an average $113,149 net worth, while the median for blacks is just $5,677 and $6,325 for Hispanics.
What’s more, blacks, who are more likely than whites to be living paycheck to paycheck, saw their annual household incomes decline by 11.1 percent – from $36,567 to $32,498 – from 2009 to 2012, according to Census Bureau data analyzed by Sentier Research.
Those two data point make the idea of an extra $1,000 per year in Social Security taxes from the pockets in households making $50,000 seem unconscionable. Over a year, that’s anxiety over tanks of gas, sufficient supply of baby diapers, or money for a modest vacation.