Dorothy Brown

[0] Wondry Plus subscribers can listen to Armchair Expert early and ad free right now.

[1] Join Wondry Plus in the Wondry app or on Apple Podcasts.

[2] Or you can listen for free wherever you get your podcasts.

[3] Welcome, welcome, welcome to armchair expert.

[4] I'm Mike Badger and I'm joined by Jennifer Catfish.

[5] Hey, Jen.

[6] Hey, Mike.

[7] How you doing?

[8] What a pair.

[9] Oh, my God.

[10] We do like an outdoor segment for outdoor tip teeth.

[11] I picture us in a fisherman's hat.

[12] Absolutely, absolutely.

[13] Maybe some waiters, maybe waist high in a small river.

[14] We're going to take some samples, and we're going to do some fly fishing.

[15] Today we have a professor of law at Emory University by the name of Dorothy Brown.

[16] Dorothy Brown has dedicated her career to understanding the ways in which U .S. tax policy drives the racial wealth gap.

[17] A mission made complicated by the fact that the IRS, despite collecting troves of data, does not collect data.

[18] by race.

[19] Her new book, The Whiteness of Wealth, How the Tax System Impoverishes Black Americans and How We Can Fix It.

[20] This was a very fun interview.

[21] Very and so informative.

[22] Dorothy's from New York and she had a lot of spring in her step, which I love.

[23] Yes.

[24] And she works at Emory, which is my not alma mater, but in Atlanta.

[25] Spiritual.

[26] My aunt went there.

[27] So I have a connect.

[28] You got a great connect.

[29] And we talked a lot about Atlanta.

[30] So if you're from Atlanta, you don't have to listen to this episode.

[31] You already know everything we talk about.

[32] Please enjoy Dorothy Brown.

[33] Now a shout out to a couple of our favorite black -owned businesses.

[34] Today I want to tell you about Henry Face masks.

[35] Fashion designer Rich Fresh founded Henry Mask.

[36] The colorful masks are all made in Los Angeles.

[37] And for every mask purchased, one is donated to medical workers on the front lines and families in need.

[38] When a lot of businesses are sadly shutting down, Henry Mask has been growing and has been able to create over 60 jobs.

[39] By the way, I have so many Henry masks, and they're sitting right over there.

[40] They're gorgeous.

[41] And they're so gorgeous.

[42] And they do like a really good job covering your whole face, which I really like because some don't.

[43] To learn more, visit henrymask .com.

[44] That's henrymask .com.

[45] Monica.

[46] Okay.

[47] And I will be highlighting Coco and Breezy.

[48] Coco and Breezy is an eyewear company founded in 2009 by two female designers.

[49] And their early designs were an instant hit in the entertainment and fashion world.

[50] They've done a few really cool collabs, like with Hershey's, so they're awesome.

[51] To learn more, visit Cocoa & Breezy .com.

[52] That's C -O -C -O -N -B -R -E -E -Z -Y .com.

[53] Cocoa and Breezy, love the name.

[54] He's an object, man. Hello.

[55] Oh, Dr. Dorothy Brown, I'm so embarrassed, and I'm sorry that we're late.

[56] It's me, not Monica.

[57] Well, I knew it wouldn't be Monica.

[58] Well, you might be wrong.

[59] too can be late.

[60] I can't be.

[61] No worries, no worries whatsoever.

[62] I wouldn't be late for a professor, though.

[63] I like to get professors approval.

[64] Yeah, right, right, right.

[65] We prioritize who we're trying to impress, and you would be very high on the list, honest of us.

[66] Are you talking to us from Atlanta?

[67] Yes, I am.

[68] And do you know what Monica is from Hotlanta?

[69] Duluth.

[70] That's right.

[71] Duluth.

[72] You did your research.

[73] I'm impressed.

[74] I can't help it.

[75] But you're not from Atlanta, right?

[76] Are you from the Bronx?

[77] I'm from the South Bronx in New York.

[78] Did you stay in New York all through, because you went to NYU first?

[79] Through college.

[80] I stayed in New York through college.

[81] I went to Fordham.

[82] And then I went to law school at Georgetown.

[83] So then I went to D .C. And then I came back to NYU.

[84] Then I clerked for a judge in the tax court in D .C., practiced law in D .C., came back to New York to work as an investment banker, moved back in with my parents.

[85] That was a blast.

[86] Uh -huh.

[87] You know, you think you get rid of your kids and they boom around back.

[88] Yeah, even if they got a law degree.

[89] Your kid gets a law degree.

[90] You're like, oh, I'll only see them on Christmas.

[91] Nope.

[92] Oh, my God.

[93] She moved back in.

[94] And then I went back to D .C. to work at HUD and then got my first teaching job at George Mason, so I stayed in D .C. Went back New York, D .C., New York, D .C. But I never took the New York bar because I did not want my parents thinking I was ever really going to move back to New York.

[95] Of course, of course.

[96] Then did you just move to Atlanta for the job at Emory?

[97] Yes, exactly.

[98] And in any of those early stages of your life, had you gone to Atlanta?

[99] I worked on a deal when I was an investment banker in Fulton County in Atlanta.

[100] And who knew at the time, right?

[101] I actually lived here.

[102] But yeah, so I worked on a deal, so I went to Atlanta a couple times, but not a lot.

[103] So I didn't know much about Atlanta.

[104] But can you give me your first impression because this has come up several times because I'm from Detroit.

[105] And the first time I went to Atlanta, I was like, oh my goodness, if I were black and in Detroit, I would move here yesterday.

[106] Like, what a difference this place is.

[107] So you are so right.

[108] And I'm going to contrast where I moved to Atlanta from.

[109] So I was teaching at Washington and Lee, which is in Lexington, Virginia.

[110] And I lived in Stanton, Virginia.

[111] Why did I live in Stanton, Virginia?

[112] Because in Stanton, so it was like 20 -something miles away, but I could walk down the street and nobody knew me. Lexington.

[113] That's a bad.

[114] I met the man. So I moved to Stanton where I lived on a block that was fairly racially diverse, but there were like no black people in Stanton, right?

[115] But more so than Lexington.

[116] First weekend in Atlanta, I'm going to the best buy because my cable isn't hooked up and I need to get an antenna so I can watch some TV.

[117] First of all, very resourceful.

[118] Because I have a full -grown male friend, Ryan Hanson, who's like, I don't know what to do about the football game.

[119] I cut the cord.

[120] I'm like, dude, we live in L .A. Get a fucking antenna and put it in your TV.

[121] Exactly.

[122] Okay, sorry, sorry.

[123] I just want very resourceful, very competent, very attractive qualities.

[124] Continue.

[125] That's okay.

[126] So I'm at the stop sign.

[127] And to the left of me is this red Ferrari with a black guy driving it.

[128] I'm like, oh, I'm never.

[129] Believe it.

[130] Yes.

[131] Yes.

[132] It seemed like a fairy tale in the 80s when we would go there.

[133] You'd be at like a popular middle class restaurant and it was at least half black.

[134] And as you drove through neighborhoods, all the middle income neighborhoods were populated with black people and they had new cars and good clothes.

[135] And I was just like, that was unfathomable coming from Detroit, which was 92 % black and among the poorest cities in the country.

[136] And truly, truly a sentence, like no option out, just a very bleak, bleak place.

[137] And I will tell you, for the most part, in Lexington, the black population was very poor.

[138] And what I learned from being in that area and moving to Atlanta is when white people are used to black people who are poor, disenfranchised without.

[139] a voice, they treat them really, really badly.

[140] And they think there are no consequences associated with it.

[141] So I didn't have a flavor for that before teaching in that area because you didn't see that in New York, right?

[142] You didn't see it in D .C. Right.

[143] And it was like, you know, there's something about the racism that's like crazy.

[144] And when I went to Atlanta and it's like a white person would bump it, you, oh, I'm so sorry, I'm so sorry.

[145] I'm like, yeah, because you don't know who I am, right?

[146] I can be the Maya's best friend.

[147] I could be whatever.

[148] You could have leverage.

[149] Right.

[150] There's an element to white people who are only around voiceless black people and how badly they treat them, that I didn't know what that looked like before I saw it.

[151] There's all these strata.

[152] And it's like, yes, the folks in Detroit, I know were looked at as like a rung above homeless.

[153] Like the way you think of homeless, like, oh, they've been disposed of.

[154] They're just sitting there.

[155] And it's over for.

[156] them.

[157] And this weird thing happens in your brain where, yeah, you're looking at them as people who have left this world that I popular.

[158] They're just in the way.

[159] They're in inconvenience.

[160] Yes, yes.

[161] And of course, I also grew up at the height of the crack epidemic.

[162] So you were seeing like zombies walk around in states that were very novel in the 80s.

[163] Yeah.

[164] Right.

[165] Yeah.

[166] No, it's very true.

[167] And it's different.

[168] And you take things for granted.

[169] So like growing up in.

[170] New York.

[171] A black person could speak their money.

[172] You know, it's no big deal.

[173] I was in high school and we were picketing for more money from the city.

[174] Just what you did.

[175] Yeah.

[176] But when I lived in Cincinnati, oh my God, Cincinnati is really the south, right?

[177] The airport's in Kentucky.

[178] And people don't pay attention to that.

[179] So one of the jokes I heard was Ork Twain apparently said when the world comes to an end, I want to be in Cincinnati because it's 10 years behind the rest of the world.

[180] So I remember.

[181] pushing for more black students to get hired at law firms.

[182] And somebody at a Cincinnati law firm said, that may be how they do it in New York, but that's not how we do it here.

[183] And I'm like, okay, one of us is confused, and it ain't me because I got 10 years.

[184] What are you going to do?

[185] Yeah, yeah, yeah.

[186] But it was very southern and very backwards.

[187] And it took like, I think the 13th or 14th dead, unarmed black person murdered by the cops before the riots.

[188] Like, if they had just stopped at 12, they wouldn't have been riots.

[189] You're right.

[190] That is so telling.

[191] That's so, so telling of what the expected reality and threshold and critical masses of a place, that if there's one and people go crazy, you're like, okay, probably pretty approaching an egalitarian.

[192] If there's 20, you're like, oh, man, they are so used to this.

[193] I would argue, too, the other area that is stark in that way is the delta in the south.

[194] Like when you're along the Mississippi River, radiating maybe two miles out from that is also uniquely the people are written off in a way that seems unique.

[195] Yeah, and very telling.

[196] Yeah.

[197] It's ironic, though, because people would assume Georgia is incredibly racist.

[198] It's the South.

[199] And, like, you maybe wouldn't put Cincinnati in that box.

[200] But Atlanta lives in Georgia and is very different.

[201] Very different.

[202] Yeah.

[203] Who was it that said the more?

[204] It wasn't Dyson.

[205] No, it was John Holt Bryant.

[206] I thought this was interesting.

[207] You've probably heard it being in Atlanta, but he said that Atlanta's the moral center of the U .S. Like you have the financial center in New York.

[208] You have the entertainment center here, but Atlanta is the moral center or moral industry.

[209] I like that.

[210] Or at least Atlanta likes to think.

[211] So there's the city too busy to hate, but I call BS.

[212] Okay.

[213] Because in Atlanta, street names change for white people not wanting to have the same street address as black people.

[214] Okay.

[215] So there's that history that people don't talk about because we're like, oh, with it, city, too busy to hate, we integrated, blah, blah, blah.

[216] I said, yeah, but you don't want to live on the same street name as black people.

[217] So don't come with me with that, right?

[218] And I have that sense it's an outsider.

[219] I'm not vested in this narrative that you're okay.

[220] Yeah, you're not the in -group that identifies as the beacon.

[221] So I think we would all agree, no one's in the end zone dancing in Atlanta.

[222] It's not like done.

[223] They haven't achieved the finish line status, but also very incrementally ahead of so many places.

[224] Oh, absolutely.

[225] And a lot of that is attributable to like the vision of Maynard Jackson.

[226] So when Maynard became mayor, one of the things he did that really built the black middle class is he required black professionals on deals.

[227] So if you want an airport contract, you've got to come to the table with some black folks.

[228] So the deal I worked on was because I was a black lawyer in the firm.

[229] And my client was a black investment banker at the firm on Wall Street.

[230] So I learned that the reason why we were at the table was because Maynard is like, you're not getting any city business if you don't.

[231] And at first, the white community bought, but when they didn't get the business, they decided they would have to live with the fact that they'd have to co -represent deals with black people.

[232] Okay, so that to me is such a double -edged sword for you personally.

[233] And I give you my own personal example.

[234] So not too long ago, another comedian who I like so much and who I've interviewed and we have since talked about it and everything's groovy.

[235] But he was saying that Basically, there's a movement for like average looking white dudes to have their own shows.

[236] And he used me as an example in that.

[237] And so, okay, those are fighting words.

[238] Let me just stop right.

[239] Those are fighting words.

[240] Okay.

[241] Continue.

[242] Yeah, here's what I said.

[243] I called them and I said, I am not upset that you think I'm average looking.

[244] I too think I'm average looking.

[245] What I'm really bummed about is that you wouldn't think I had earned the position I have through being a groundling, studying at UCLA, like all these things I. did.

[246] It really hurts that you think I'm only sitting here because I'm white.

[247] And I was like, oh man, what a great feeling for me to experience because this is how every black person that is in a white color job probably feels that the people around them think they're only there because of that.

[248] So as much as it's so great, it was mandated and you did get a seat at the table, I imagine it's also very rife for complexity.

[249] So here's a funny story.

[250] First meeting of this deal, I'm flying from DC and let's put it this way.

[251] When the sun isn't shining, people lose their minds in Atlanta.

[252] So there's fog and the airplane's circling.

[253] I'm like, oh, crap, I'm going to be late.

[254] I'm going to be late.

[255] Of course I'm going to be late.

[256] So I get in the cab, go straight to the meeting.

[257] My butt is not in the chair before White Baker number one asked me a question.

[258] So I answer it.

[259] And then White Banker number two asked me a question and I answer it.

[260] And then we move on.

[261] And afterwards, I said to my client, I said, what the hell was that about?

[262] Oh, they were just testing you because they thought you were just here because you were black.

[263] And I knocked it out of the park because I'm like, bring it.

[264] Yeah, yeah, yeah.

[265] I've had better than you for breakfast.

[266] So I guess I learned that's part of the cost of doing business.

[267] Even if Maynard didn't have that rule, if I'm in the room, white people assume.

[268] it's because of affirmative action, right?

[269] They assume I'm not qualified.

[270] They assume, and I've had that forever, so I don't even register it that much anymore, or depending on the mood I'm in, I like use it as an opportunity to make you like never do this again.

[271] Yeah, let's have some fun.

[272] Well, I would imagine you could take kind of an art of war approach, which is, yeah, yeah, I'll appear we can be strong, let's do it.

[273] Like, that's a great place for me to start from, with your expectations low.

[274] Yes, yes.

[275] Because what I try to do when people do stuff like, so I was at a conference presenting my race and tax work.

[276] And the first comment was directed at me. And it was by a white male tax law professor who would tell you he's progressive.

[277] And he says, Dorothy, everybody knows your work is irrelevant because blacks are poor and don't pay a lot in taxes.

[278] I'm at this big conference room full of tax law professors all over the country.

[279] And this is what the jackass says first, right?

[280] Yeah.

[281] So my response was, well, if you're right, then what we want is our children or grow up to be poor.

[282] And the room bursts out laughing and he turns beat red because there's nothing.

[283] A white guy hates more than being laughed at.

[284] Yeah, yeah.

[285] And that is my superpower.

[286] Yeah, yeah.

[287] Do you watch Handmaid's Tale?

[288] Oh, I watched the first two seasons and it just got too much so I couldn't watch it.

[289] It's a lot, yeah.

[290] Yeah, it's definitely Stockholm porn.

[291] But, yeah, in that they quote, maybe it's not the writer's quote, but it's a man's greatest fear is being humiliated in public and a woman's greatest fear is being murdered by a man. Oh, yeah, Margaret Lappler.

[292] Okay, who's humiliated in public?

[293] I've heard that, yes.

[294] Yeah, yeah.

[295] I'd rather be shot in the back of the head than humiliated in public.

[296] See?

[297] There we go.

[298] See?

[299] Proving the point.

[300] Exactly.

[301] It is funny, though, when you're a part of any marginalized group that, you can choose to use some of these opportunities as fun.

[302] You know, like even the other day, sometimes when I'm talking to people for the podcast on like scheduling and stuff I'm talking to people's publicists.

[303] And to them, I'm just like this young girl who they're talking to who doesn't really have any power.

[304] I work for DACs.

[305] And once they start going down a road, I'm like, no, no, no, no, no, no. I will tell you right now, you have no leverage.

[306] You're coming on our show, and I will tell you when I make the decision, not Dax.

[307] That's worse for me. And it feels really good to be like, don't do this to the next person.

[308] Right, right.

[309] No, it's very true.

[310] And as a black woman who teaches tax, it's a very white male field.

[311] And then I had the audacity to write about systemic racism and tax.

[312] And all they want to talk about is class.

[313] It's not race.

[314] it's class.

[315] Black people are poor and don't pay a lot in taxes.

[316] It's this mindset that if we're talking about black people, then they're poor and they're not paying a lot in taxes when three quarters of black Americans are not living in poverty.

[317] So can you tax law professor do the freaking man?

[318] Yeah.

[319] It's like, really?

[320] I got to tell you.

[321] So it's been an uphill battle.

[322] Explain how, because on the surface you could say, I imagine if you're an outsider and you haven't study this the way you have.

[323] The IRS is one of the few agencies that will actually never ask your race, right?

[324] You're not putting your ethnicity on a tax form.

[325] So it could be argued that if ever there were a system that couldn't possibly target a race, it'd be the one that doesn't even know whose race is who.

[326] Yes.

[327] And so two responses.

[328] One is ProPublica has done research showing that people who claim the earn income tax credit are being audited to a great degree.

[329] And it's disproportionately impacting black people because they live in the South.

[330] So the audits have been disproportionately in the South where lots of Black Americans live.

[331] Well, I hate to sell you down, but I don't know that everyone knows the earned income.

[332] So I think everyone gets to deduct, I don't know what, the last time I did it, 10, 50 easy.

[333] It was like 18 grand.

[334] I don't know what it is now.

[335] So the earn income tax credit works for low -income wage earners.

[336] The greatest amount is if you have children and the least amount is if you have no children.

[337] And if you're making like $60 ,000, you're not eligible.

[338] So it's purely for low -income wage earners.

[339] And it's really, really complicated.

[340] Said the tax law professor, it's freaking complicated.

[341] So you have people in Congress, Republicans typically, who, say it's rife with fraud and abuse.

[342] And it really isn't.

[343] It's just so complicated.

[344] People literally don't know what they do.

[345] It's rife with error, probably.

[346] It's rife with error.

[347] Yeah.

[348] There was a government study that showed when you went to tax return preparers as well as individuals and government officials, they all made mistakes.

[349] How complicated is that?

[350] Okay.

[351] So there's this earnic of tax credit and it could give you a refund.

[352] So if you're eligible for a credit that is higher than the amount of taxes that were withheld, you get money back from the government.

[353] Okay?

[354] And these are low -income wage earners, so it's like a really good thing.

[355] And it lifts children out of poverty.

[356] What is the number now, like for a single person and for someone with dependents?

[357] Like, what can you make tax -free federally at this point?

[358] I want to say 20 -something, okay.

[359] 20 -something thousand, roughly.

[360] Okay.

[361] And if you're in the earn -income tax credit, range, you will wind up getting a refund back.

[362] So it's kind of like a wage supplement.

[363] Yeah.

[364] Well, more than 50 % of EITC claimants are white.

[365] But what the ProPublica research showed is there's a disproportionate percentage of black people being audited because the audits are in the south where a lot of black people live.

[366] Okay.

[367] So you could say, how is this possible?

[368] the IRS doesn't collect statistics on race.

[369] I guess it's just stuff happens.

[370] It can't be racism.

[371] So not collecting race data doesn't mean black people look at targeted because the system finds a way.

[372] Well, am I right in saying, though, this gets into a really debated issue, which is do we evaluate racism on policy or results?

[373] And my book looks at it both ways.

[374] It looks at it on policy and it looks at it on results.

[375] And what you see is the policy would have told anyone who was paying attention, it was going to affect black people negatively.

[376] So are they doing these audits based on errors that occur?

[377] Is there a disproportionate amount of errors being occurred in the South?

[378] So the IRS would say they do these.

[379] Because they're easy.

[380] They can do them by mail.

[381] They can do them by correspondence.

[382] Dorothy says they do them because they're not represented by attorneys.

[383] Because if you really want to decrease the tax gap, which is the amount of money that's owed the government versus how much is paid, you go to hedge funds.

[384] You don't go to the poorest Americans.

[385] That's not where the freaking money is.

[386] But that's where the people who aren't represented by.

[387] council are so it's easy and you can like close the case you can close the audit you can do all of that right well they yeah it would appear that they've chose a quantity over quality strategy and that they know they're going to have to invest a bunch to win one of these cases against a law firm right and it's just easy to pick on a vulnerable community it's just easy to pick on people who don't have the sophistication to respond they get a letter from the IRS and they start panicking and it's just It's fraud, right?

[388] So that happens in the absence of any race data.

[389] So I was on a panel once, and I was talking about race and tax, and there was someone from the IRS who said, we don't want to know.

[390] We don't want to know.

[391] Well, okay, but I wrote a book that says, just because you don't know, doesn't mean black people aren't getting screwed, okay?

[392] Well, that's like claiming ignorance of the law when you get pulled over.

[393] We don't really accept that.

[394] Exactly.

[395] Exactly.

[396] So I understand this mindset that says, well, we don't really want to know, but black people are paying higher taxes.

[397] So I want to know and I want to fix it, right?

[398] So this colorblind approach that the IRS has taken, which is contrary to virtually every other government agency, is in my mind intentional, even though I can't, like, show you the smoking gun.

[399] But you see every other government agency collecting race statistics and you don't do it.

[400] That's not accidental.

[401] That's like, I don't want to know.

[402] I don't want to have to deal with this.

[403] We're just going to say it's colorblind.

[404] It's class, not race.

[405] That's often what I get.

[406] And it caused me to change my scholarship a little bit.

[407] I started just talking about race and the white academic to say, well, Dorothy, I think it's class and not race.

[408] And then I would have to then show them race and class that showed, for example, at all income levels, black people are disadvantaged this way.

[409] Then it causes them to stop talking about class.

[410] Just not to mention class and race are connected.

[411] Like, you can't say that they're separate.

[412] I mean, we've done a lot of these episodes and just learning, like, you can't parcel out the fact, that there are so many black people in these lower income areas.

[413] It's all systemic.

[414] It's all part of racism in general.

[415] Yes.

[416] But the other thing I want to say is like also what a bizarre defense to an inequality, which is like, well, no, no, they're just fucking over lower class people.

[417] Yes.

[418] Yeah, exactly.

[419] That already to me is like, okay, even if let's say they were right about that, why is that now?

[420] Why are you so proud?

[421] Yeah.

[422] Oh, no, no, we're fucking over poor people, Dorothy.

[423] Yeah.

[424] Yeah, we're not targeting black people.

[425] All poor people.

[426] Need to get fucked by us and we'll do it.

[427] Nine ways till Sunday.

[428] Exactly.

[429] It also belies one other point.

[430] Progressive white Americans want to believe that the black middle class and the white middle class have the same experiences.

[431] And what my research does is hit them over the head that is exactly not the case.

[432] And that's really hard.

[433] at least for liberal white academics to hear really hard because they want to believe in this American dream and they want to believe that black people get to a point where they don't have to deal with racism because if they don't, they have to look in themselves and say, maybe I'm part of the problem.

[434] And let me tell you, academics walk around and denial on a lot of different levels and that's one of the biggest ones.

[435] They're racism.

[436] Oh, my gosh.

[437] For sure.

[438] When I want to argue with Monica.

[439] I asked first if she wants to argue by saying you want to dance.

[440] And if she says yes, then we have a debate.

[441] Let's dance.

[442] I'm always very concerned about binary options.

[443] So it's race or it's class.

[444] To me, I'm a little nervous about saying it's one or the other.

[445] And I'll give the example.

[446] So some black academics, in fact, came out and said, you know, when you're saying that black people are disproportionately affected by COVID, you're also kind of ignoring the perfect correlation between black people living in densely populated areas.

[447] Yes, you could say it's disproportionately black or you could say it's disproportionately people living in densely populated areas.

[448] Now, I think both things are true.

[449] I think it is uniquely hard on black folks.

[450] And I think there are other criteria that have become synonymous with black folks that make it likely that these things will be different.

[451] So I don't know what I want to make sure, but it made me think of that where I think, okay, it's most certainly you have the data disproportionately affecting black folks when it comes to federal taxes and also a bigger percentage.

[452] You say 75 % of black folks are not living below the poverty line?

[453] And do we know what percentage white folks?

[454] I know white folks are the most poor.

[455] So I think the poverty rate in the white community is 9%, 20 -something % for black Americans.

[456] so to which we get the disproportionate percentage of black living in poverty.

[457] So I hear that.

[458] Thinking of the COVID example, but black people are more likely to have comorbidities because of racism, i .e. stress, high blood pressure, right?

[459] So even if you were to look at the percentage of white Americans who live in highly dense populations versus black Americans, and then you could normalize and say, okay, there's that piece.

[460] But then the black people, we are living with stress that our white peers don't have, which leads to high blood pressure and research that I've talked about where middle income black and Hispanics are more likely to have bad health outcomes, even when they have health insurance, because they're dealing with a racist system.

[461] Stay tuned for more armchair experts.

[462] If you dare.

[463] We are supported by Pandora.

[464] Now, I adore my mom.

[465] She's the first love of my life.

[466] And it's Mother's Day.

[467] And that is exactly why I went to Pandora and bought my mother a beautiful necklace that will remind her of me all year round.

[468] I got this beautiful bracelet and it's really simple.

[469] I should probably get one for my mom too.

[470] We can have matching.

[471] And I suggest you let mom know you'll always be by her side with a message of love that she can wear every day.

[472] Shop until April 22nd through the 26th and receive a free, limited edition, sterling silver bangle with your Pandora purchase of $150 or more.

[473] This season, Pandora has gifts for every mom with new designs in their collection of contemporary classics.

[474] They offer more than just charms with a wide variety of rings, necklaces, earrings, and bracelets.

[475] And jewelry can be customized to fit all styles and personalities.

[476] Thank the mom in your life for always being there with a sparkling gift from Pandora jewelry.

[477] Shop online or in store between April 22nd and April 26 and receive a little.

[478] a bonus gift with your $150 Pandora jewelry purchase, a limited edition sterling silver bangle.

[479] Go to us.

[480] dot pandora .net slash dax to start shopping or find a store near you.

[481] That's us.

[482] dot pandora.

[483] dot net slash dax.

[484] Us .pandora.

[485] dot net slash dax.

[486] We are supported by Tushy.

[487] The future of toileting has arrived.

[488] Okay, it's technically been around for centuries but hideously expensive, costing thousands.

[489] Now the brand new hello Tushy 3 .0 modern bidet attachment is here to level the plane field.

[490] It's stylish, eco -friendly, easy to install, and affordable.

[491] I'm so excited.

[492] I'm going to put these all over my house.

[493] Of course.

[494] In every bathroom.

[495] Now, Hello Tushy 3 .0 doesn't just cleanse your butt with a precise stream of fresh water.

[496] It cleans itself before and after it's used with the smart spray automatic self -cleaning nozzle.

[497] It attaches to your existing toilet, requires no electricity or additional plumbing, and cuts toilet paper use by 80%.

[498] So the Hello Tushy Bidavit.

[499] pays for itself in a few months because you don't wipe at all.

[500] Just poop, spray, dry, and go.

[501] Sanitation is simple.

[502] The schmuch shield offers easy cleaning and the knobs are naturally antimicrobial.

[503] Already got a tush on your pot?

[504] Upgrade to the new 3 .0 model.

[505] If you're new to the revolution, join millions of happy Hello Tushy customers right now and have a clean butt with every flush.

[506] Go to hellotushy .com slash armchair to get 10 % off your order and free shipping.

[507] That's Hellotushy .com slash armchair.

[508] This would be a really fun opportunity for me to talk about something I learned in anthropology, which was black folks suffer from hypertension and all the many outcomes of hypertension, stroke and heart disease and all this stuff, at such a disproportionate rate in what was discovered by some anthropologists was, first, the black folks that were brought here were brought from East Africa, walked all the way across Africa.

[509] board these ships.

[510] And in that process, they were not being given water, right?

[511] So a great number of people died during the migration to the boat.

[512] And the people that lived were people that had an abnormally high salinity count in their body, so it prevented them from dehydrating.

[513] Then they were put on boats for a month -long trip, again with no water.

[514] So then there was a whole other wave of people who died from dehydration.

[515] So the only people that made it here in the slave trade were people who were genetically predisposed to have a very high salinity count, which kept them alive.

[516] So it was this two rounds of forced natural selection.

[517] So we need to acknowledge that that is a health condition that was created against y 'all's will that you will now live with in this country forever.

[518] It's genetically been predisposed for that.

[519] And of course, now we also have on top of that the stress of racism.

[520] You know, years ago, there was a book by Ellis Post called The Rage of a Privileged Class, and it was basically a book of stories about black people who seemed to have made it.

[521] Partners in law firms, and this partner to law firm went in on a Saturday, and a white male junior associate didn't know who he was and asked him for ID.

[522] And the partner, like, gave the ID, and I'm like yelling at the book, what the hell you do that for?

[523] Get that junior associate fired.

[524] You would feel so much better.

[525] But years later, he was telling this story and it got him just as angry.

[526] I mean, there's like crap we deal with on a daily basis.

[527] And the systemic racism that you deal with in these jobs is severe.

[528] And everybody has to figure out what works for them.

[529] What works for me is just ignoring stuff.

[530] Whatever.

[531] Delete.

[532] It's like, no, no, no. Not today.

[533] Delete.

[534] Is the prevailing, like, racism or residual racism, even at a college that you're here, look at this, you're a tenured professor.

[535] Is there an expectation of gratitude that you should be expressing at all time?

[536] Yes, which is so not me. So, yes, absolutely.

[537] Because I'm South Bronx, right?

[538] Wherever I go, I am from the South Bronx.

[539] And I'm like, I'm very direct.

[540] You never have to wonder, well, what does Dorothy think?

[541] Or as one of my colleagues said, oh, we know you don't care what we think.

[542] And I'm like, my work here is done.

[543] You all know me. So, yeah, there is this, you should be grateful.

[544] And I'm like, for what?

[545] Yeah.

[546] You're not discriminating against me, choosing not to hire me because I'm black?

[547] Yeah.

[548] So there certainly is that.

[549] And I've been a law professor since 1991.

[550] One, Emory is my fourth law school, and I like to joke, they're all crazy.

[551] And they are.

[552] But being tenured is like the best job ever.

[553] I love, I love my job.

[554] I love my students.

[555] I love my job.

[556] We got to go interview an old classmate of mine in anthropology at UCLA, who's now become, like, he's won the MacArthur Grant.

[557] He's now a professor at UCLA.

[558] And we're interviewing him on stage, and I'm like, what stories are we going to tell?

[559] he's like, oh, I'm tenured.

[560] So let's talk about running from the cops on your motorcycle and crashing into a bush while we're drunk.

[561] And I was like, oh, that must feel so good.

[562] Yes, yes, and yes.

[563] So what is the disparity?

[564] Like, what are the numbers?

[565] How much more are black folks on average paying in their taxes?

[566] Like, what are those numbers?

[567] So I haven't done that calculation.

[568] What I've done is look at how tax laws disadvantage black Americans.

[569] when they engage in the same activity as white Americans.

[570] So, like, let's take marriage.

[571] A lot of people think when you get married, it means you get a tax cut.

[572] Well, if you're white, the answer is, yeah, that's probably what it means.

[573] If you're black, that is not what it means.

[574] So let's take two couples.

[575] One couple, and it's typically a he, he makes $100 ,000.

[576] She is a stay -at -home spouse.

[577] And then we'll take a couple who makes $50 ,000 each.

[578] the 100 -0 couple gets a tax cut when they get married because if he was single, he would be paying higher taxes.

[579] But the rate schedule for married means his taxes go down.

[580] So the unit's taxes go down.

[581] That 50 -50 couple, they're not getting a tax cut.

[582] And when you step back for a minute and say the tax law treats those two households the same, but they are so not the same.

[583] It takes two workers to get the income of one.

[584] Why do we treat them the same?

[585] And by treating them the same, we give the $100 ,000 single wage in our household a tax cut, but the other one, no tax cut.

[586] And guess what?

[587] Census Bureau data tells us that $100 ,000 household with the one worker is likely white.

[588] And that dual equal earn a household is likely black.

[589] And when this came out in 1948, it was eminently predictable even in 1948 that more black wives worked than white wives.

[590] Really?

[591] So this isn't news.

[592] This is tax law that's driven by white members of Congress who know what their family looks like and thinks, yeah, this makes total sense.

[593] Yeah.

[594] So I want to hear some more problems before I hear solution.

[595] So what's another example?

[596] Homeownership.

[597] Everybody talks about, well, we can solve the racial wealth gap if we get more black people own in homes because it's true the majority of black Americans are renters, not homeowners, and the majority of white Americans are homeowners.

[598] So you think, oh, yeah, yeah, we just need to get more black homeowners.

[599] Well, nope, because here's the problem.

[600] White homeowners and black homeowners live in different neighborhoods.

[601] So again, let's use an example.

[602] White homeowner spends $100 ,000 on a home.

[603] Black homeowner spends $100 ,000 on a home.

[604] Neither people live in L .A. Not people who live in L .A. Not even our closet.

[605] Let's be clear.

[606] Yeah, they're not Californians.

[607] Continue.

[608] No, no, no, no, no, no. You are very, very correct.

[609] So your audience is like, what is she talking about?

[610] It's a hypothetical.

[611] It's a hypothetical.

[612] Easy numbers.

[613] Yeah, easy numbers.

[614] Easy numbers, right?

[615] So the $100 ,000 home in the white neighborhood is going to appreciate significantly.

[616] Why?

[617] Because the majority of homebuyers are white and they want to live in virtually all white neighborhoods.

[618] That's where most white Americans actually live.

[619] The black homeowner doesn't live in that neighborhood.

[620] The black homeowner lives in a racially diverse or all black neighborhood.

[621] And that home is not going to appreciate the way the home in the white neighborhood would.

[622] So our tax subsidy says, if you are married and you sell a home and you make half a million dollars, you get to keep that tax free.

[623] But if you sell a home at a loss, you don't get a tax break for the loss.

[624] You don't get to deduct that.

[625] You don't get to deduct.

[626] Nothing.

[627] You just wait bye -bye to the loss.

[628] Well, what we see is homogeneous white neighborhoods are where the significant tax -free, appreciation is.

[629] And in racially diverse for all black neighborhoods, those homeowners are more likely to sell for a loss, a non -deductible loss.

[630] So you look at this and you go, oh, you know, tax -free gain, makes sense, no loss.

[631] Okay.

[632] But black people, once again, engaging in the same behavior, get disadvantaged.

[633] And it's why homeownership increasing on the black community will not solve the racial wealth gap problem because we're not buying in those all -white neighborhoods.

[634] Why not?

[635] Because if we do, it's a really good financial investment, but your white neighbor's going to call the cops on you.

[636] And if you have kids, they're in school, then the teacher's going to target them for misbehavior when they're just doing what the white kids are, right?

[637] But they're just perceived as young criminals.

[638] So you have all, this what I call racism triage, you then have to engage in if you're black in an all white neighborhood because you want to get financial benefits.

[639] Whereas if you live in a black neighborhood or a racially diverse neighborhood, you don't have that issue.

[640] But I will tell you don't put all your money in your house.

[641] I will tell you don't take out a home equity loan because you're not necessarily going to get out of your home what your white colleague at work.

[642] gets out of their home.

[643] I want to bring up some weird statistic I learned in an L .A. Geography class.

[644] I don't know where it falls into this, but I just always think about this.

[645] This statistic, I might get it a little wrong, but it was virtually this.

[646] If you take the four groups in Los Angeles that are homebuyers, white people, Asians, Latinos, and black people.

[647] White people want to live with white people first.

[648] Like, when they're pulled, they prefer to live with all white people.

[649] and then they would prefer next to live to have Asian neighbors then Latino, then black.

[650] Yes.

[651] If you ask Asians, Asians want to first live with all white people, then they want to live with Asians, then they want to live with Latinos, then they want to live with black people.

[652] And then the Latinos want to live with all white people.

[653] Then second Asian, last black.

[654] Black people want to live with all white people, then Asians, then Latino, then black.

[655] This was in 2000, It's not true.

[656] The research shows that black Americans are fairly closely supportive of either an all -black or racially diverse neighborhood.

[657] Their least favorite neighborhood is the all -white neighborhood.

[658] Okay.

[659] And research shows that the animus against black homeowners doesn't translate to Asian and Latinx.

[660] Yeah.

[661] So that what you had said at the beginning is absolutely right.

[662] Okay.

[663] The least favorable is the black homeowner, right?

[664] The black neighbor.

[665] And when I presented this research, I got the most pushback from white law professors who basically were living in all white neighborhoods and didn't want to get called out for it.

[666] So they, like, didn't like what the research showed.

[667] And they would always try to talk about, well, is it really racism?

[668] Or is it that, you know, we don't want our property values to, fall and we're concerned.

[669] And my response is as a black homeowner, I don't care.

[670] Whether you put on a clan, you know, costume and go marching or think you're the best person ever on race, my home values are being affected the exact same way.

[671] So I don't care, right?

[672] Intent is something that a lot of white Americans care about because they want to prove that they're not racist.

[673] But if you're talking about the impact on black wealth intent is irrelevant yeah i'm getting hurt yeah yeah oh wow that's a great example two great examples yeah are there is there a third jobs okay so let's say we have again black worker white worker they're in cubicles next to each other and let's suspend disbelief and assume they each make a hundred thousand dollars uh -huh and i say suspend disbelief because research says the labor market is going to pay the white guy more, even though they're equally qualified.

[674] But we're going to suspend disbelief for the sake of the example.

[675] So the white guy who has a $100 ,000 salary has his parents pay for his kids K through 12.

[676] When grandma died, he inherited the house.

[677] The black guy, on the other hand, is sending cash home to his parents, maybe a grandparent, maybe a sibling, because they're about to be evicted or the light is about to get turned off.

[678] So research shows black college graduates are more likely to send money up to their parents and grandparents.

[679] White college graduates are more likely to get money from their parents or grandparents for down payment for homes, paying for K through 12.

[680] In other words, wealth building.

[681] Yeah.

[682] So imagine they both have this $100 ,000 salary.

[683] Which one of them is going to be most likely to max out on their retirement account with their employer office?

[684] Right.

[685] The white guy with $100 ,000 who's not sending money home to mom and dad or grandparents, right?

[686] Also, all those things you just listed, basically estate tax stuff, there's a $23 million deduction.

[687] So they're also receiving all of that tax -free.

[688] Oh, it's even worse.

[689] It's tax -free under the income tax system, too.

[690] Right.

[691] So it's never tax.

[692] Right.

[693] Whereas the black college graduate who send money to their parents, they can't max out on their retirement account.

[694] If they're lucky, they'll be able to participate somewhat, but they're also more likely to make an early withdrawal because they need the money.

[695] Yeah.

[696] And there's a heavy tax penalty on early withdrawals.

[697] So if you have a job and two people, they're experiencing.

[698] that work, that salary very differently based on race.

[699] Okay, so now let's get into what some of the solutions could be.

[700] Because I can already see a potential problem, which is what you're saying is most certainly true.

[701] And also there is some significant percentage of black Americans who are not in the category that they're paying up.

[702] And then they are some receiving, right?

[703] There are some now multi -generational successful black family.

[704] So how do we do a system which is not going to.

[705] to reward those folks, but then help the folks that are being penalized.

[706] So first I'll say that when black people manage to wrestle wealth out of a system designed for white wealth, it's a miracle and not the norm.

[707] It's not something we should expect.

[708] So I don't look at it as finding out a way not to reward those successful black people who have managed to wrestle wealth out of it.

[709] of a system that wasn't designed for us.

[710] But I also think about that's aberrational.

[711] Most Black Americans haven't figured out how to wrestle wealth out of the system.

[712] Yeah.

[713] Because the system is designed for that not to happen.

[714] So when I think about solutions, the first thing I think about is we've got to have race and tax data published, period, full stop.

[715] If I hadn't become a detective over the last 25 years and did the research and then wrote the book, you wouldn't know.

[716] you still wouldn't know.

[717] Yeah.

[718] But that wouldn't stop black people like my parents from paying higher taxes.

[719] So we've got to make this the norm where race data is published.

[720] And President Biden's first executive order was about racial equity across the government, including disaggregating data by race, right?

[721] So there is now a mechanism.

[722] I just don't think he has the right people at Treasury.

[723] me to do it.

[724] Okay.

[725] So there's this big picture.

[726] We want this done, but then you don't have people who have ever talked about race and tax in charge.

[727] So like good luck with that, right?

[728] But step one, we have the executive order.

[729] So there's a framework to move forward.

[730] The second thing I think, and I talk about this in the book, is something I call a reparations tax credit that would compensate black Americans for the years of paying higher taxes.

[731] And I would argue that even the black Americans who have wrestled wealth out of the system have paid higher taxes because of their race.

[732] So I'm going to give you an example.

[733] A famous example.

[734] Please be Jay -Z and Beyonce.

[735] It's Barack Obama and Michelle Obama.

[736] Okay.

[737] He was president and along with his him came his tax returns.

[738] Now, nothing made me happier as an academic studying race and tax than a black man who became president and released like 20 years of his tax return.

[739] You couldn't tell me nothing.

[740] I'm studying.

[741] I was figuring it out.

[742] I was like, oh, I got a black family's tax returns other than mine, right?

[743] This is like getting all the Nixon recordings or something.

[744] This is like a treasure truck.

[745] I struck gold.

[746] Nobody was more excited than I was.

[747] It was like every April 50, ooh, ooh, ooh, I'd like wait by the computer, let's look at this year.

[748] And what I found were there were two Obamas.

[749] They were the early Obama's between 2000 and 2004, where they were both lawyers, but they were broke as hell.

[750] They had like $120 ,000 of student debt.

[751] They had to get a down payment for their condo from his grandmother.

[752] They had almost no savings.

[753] They were broke.

[754] So at the Democratic convention, I think in 2012, Michelle Obama said something like we were young in love and so broke.

[755] And people like mocked them.

[756] And I'm like, oh, I see the taffitur.

[757] Those people were broke.

[758] But then a miracle happened.

[759] The miracle was he ran for Senate and was picked by John Kerry to give the speech he gave about purple.

[760] America.

[761] Nobody knew who he was before that speech.

[762] Well, he gives this speech and his publisher decides to reissue dreams of my father.

[763] That did not do well when it sold the first time.

[764] So they got the rights.

[765] They issued the paperback bestseller.

[766] He then gets a million dollar book deal.

[767] That changed everything.

[768] They paid off their student loans.

[769] They were able to open child savings accounts from Malia and Sasha, which they never did before.

[770] And what I discovered is at their income level, they paid higher taxes than the average millionaire because the average millionaire gets a lot of his income from stock.

[771] Yeah, capital gains.

[772] Didn't have, yes, see, you got it.

[773] And the Obamas didn't have that because even wealthy black people don't have stock.

[774] to the extent of wealthy white people.

[775] So I learned from the Obamas that even rich black people wind up paying more taxes than rich white people because of how we earn our money.

[776] Royalty income is taxed the same way as wages.

[777] Income from stock is taxed at a low preferential rate.

[778] Yeah.

[779] I haven't said it enough.

[780] The whiteness of wealth, how the tax system impoverishes black Americans and how we can fix it.

[781] That's your book.

[782] We just keep referencing your book, and I've not said it enough, the whiteness of wealth.

[783] You can remember that title.

[784] Okay, please continue.

[785] Yes, so what's my solution?

[786] So my ideal solution is this reparations tax credit, which would work for every black American because we've paid higher taxes.

[787] Unfortunately, there's this thing called the Supreme Court and they won't let that fly, right?

[788] So targeting black Americans for tax relief would require me to prove that Congress intended to tax black Americans hire.

[789] That it was a discriminatory process.

[790] Intent, yes.

[791] And all Congress can say is, well, no, we were making tax policy for the majority of Americans.

[792] That's all they'd have to say, and they'd win.

[793] Yeah.

[794] So my next best alternative is something called a wealth tax credit.

[795] Why?

[796] Because the Supreme Court says we could discriminate on the basis of wealth, and we can't discriminate on the basis of race.

[797] So because there's this racial wealth gap, my wealth tax credit, which would apply to any taxpayer in a household with below median wealth, is going to disproportionately benefit black Americans because we have significantly below median wealth.

[798] But it's also going to benefit white Americans in below median wealth households in Latin X and Asian Americans and indigenous communities.

[799] So to me, that's something I would think a lot of people could get behind.

[800] See, I think that's uniquely a smart approach because you're using their own tools.

[801] So we had an expert talking about systems and they said it doesn't really matter what the intention of a system is.

[802] Whatever the results you're seeing are the exact results the system's supposed to produce.

[803] The mere fact that those are the results prove that the system is designed to do that, whether that was the intention or not.

[804] So I do love the idea of taking the exact same approach, which is having these results we don't like and using it in reverse is very clever.

[805] And then my big picture idea for reform would be to get rid of these deductions and loopholes and tax -free breaks because they tend to disproportionately benefit white taxpayers and basically tax income from labor the same way as income from capital and not have deductible.

[806] other than like a living allowance, which I would argue is what you an individual or you a household would need to live on, not minimum wage, because minimum wage doesn't cut it.

[807] What would it actually take for you to thrive and the amount over that you'd pay taxes at a progressive tax system and the amount under that you don't pay taxes?

[808] the difference gets refunded to you in a sense on expanded earn income tax credit.

[809] So that's like my big picture idea for how to fix this.

[810] Get rid of the deductions and loopholes, which are part of the problem.

[811] Yeah, I'm in favor of that.

[812] Now, I don't know this.

[813] I should have read this at some point.

[814] But I guess if I was trying to explain why capital gains could be ultimately more beneficial at a rate of 20%, would simply be that labor doesn't turn over, right?

[815] So labor, you're going to make $100 ,000 in a year, and we're going to take $30 ,000 of that, let's just say.

[816] Now, if we do capital gains, capital gains can turn over many, many times in a year, right?

[817] So someone who's investing, they could make $100 ,000 next month.

[818] They can pay 20 % of that.

[819] Now they have $80 ,000 to reinvest, and now they're going to turn that over.

[820] That cumulatively, it would actually be more money coming into the federal government if we allowed that money to keep moving quickly.

[821] and incentivizing that.

[822] Is that the rationale for it?

[823] Because that does seem to be a plausible one.

[824] Our end goal should be to collect as much taxes as possible.

[825] What would be the best way?

[826] Another argument is the corporate tax, which I'm pretty in favor of keeping low, simply because we're competing with the globe.

[827] It's not something we can realistically say, we're going to have 30 % because everyone's just going to go to England where it's 5%.

[828] So I do think sometimes we got to factor these things in.

[829] So what is the capital gains defense?

[830] Well, depending on what day you were asked, right, there are several.

[831] One is it takes into account inflation, right?

[832] I pay $10 ,000 for stock today.

[833] It appreciates to $12, but what if that $2 ,000 is attributable to inflation?

[834] It's not fair to tax all of it like you would wage income.

[835] Another one is what Dax described.

[836] It's called the lock -in effect.

[837] I won't sell because I'm afraid to pay.

[838] taxes.

[839] So I'll just hold it and then that's not good because we want to get capital moving.

[840] So there are easy pushbacks to this.

[841] So I'm going to take the royalty income, the book income from President Obama.

[842] That is treated like wage income.

[843] But he wrote that book a really long time ago.

[844] And he's still getting royalty income like five, 10, 15 years later.

[845] And nobody says we should tax him less because this was income that was built over a period of years, right?

[846] We say it's royalty, so it's tax like wages.

[847] The other pushback is the holding period.

[848] How long do I have to hold stop so that when I sell it, I get the low preferential rate, a year and a day.

[849] So don't talk to me about inflation, because really, a year and a day.

[850] So when you look at the details of the law that governs the preferential rate, you realize it's kind of BS.

[851] And Ronald Reagan, Ronald Reagan's tax reform act of 1986 had at the pillar taxing income from stock the same way as income from wages.

[852] That was one of his big innovation.

[853] So that was in 1986.

[854] So we've had a time not too distant past where they were taxed the same.

[855] And civilization as we know it didn't.

[856] not come to an end.

[857] Well, Monica wasn't born yet.

[858] You got to factor that in.

[859] Monica wasn't born yet.

[860] And that's a force.

[861] That's a very, that's a force that has to be considered in all these arguments.

[862] I was 11.

[863] Yeah, that's right.

[864] That's right.

[865] Yeah.

[866] So I do think there's merit to taxing another argument for taxing income for stock the same way as labor is the complexity that has built up around trying to recharacterize wage income as capital gains and eligible for the preferential rate is a cottage industry.

[867] It is a full employment for tax lawyers act, right?

[868] Yeah.

[869] So by treating those the same, we would get rid of a lot of inefficiency.

[870] I'm just going to say it.

[871] Because if there's no way around it, there's no way around it.

[872] So just deal with it.

[873] So that's my bias showing.

[874] There's no legitimate reason in my book for taxing income.

[875] come from stock differently than income from wages.

[876] Stay tuned for more armchair expert, if you dare.

[877] We are supported by liquid death.

[878] Don't get scared.

[879] It's delicious, refreshing water.

[880] It's currently stocking our fridge, and I'm popping them several times a day.

[881] It is, and it's really funny.

[882] Every time I see it out, I do a double take because I think it's beer.

[883] Yeah, you think I'm drinking a tall boy.

[884] Yeah, but you're not.

[885] No, because that's what it looks like.

[886] But it's actually just mountain spring water.

[887] And look, if you fall in love with liquid death the way I have, because it is the most delicious water and there's no plastic, which I love.

[888] Your kids may fall in love with it.

[889] And I just want to warn you, you may get a call from a teacher that says they saw your kid on Zoom class banging back a tall boy of beer.

[890] But don't worry.

[891] It's just the spring water brand liquid death.

[892] Now, why is it called liquid death?

[893] Well, that's because it will brutally murder your thirst and their infinitely recyclable tall boy cans are helping to bring death to plastic bottles.

[894] They also donate 10 % of their profits from every can sold to help kill plastic pollution.

[895] I urge everyone to try liquid death and bring death to plastics.

[896] Liquid death is available at 7 -Eleven nationwide, so go to your local 7 -Eleven to pick up some cans.

[897] Liquid death.

[898] We've all been there.

[899] Turning to the internet to self -diagnose our inexplicable pains, debilitating body aches, sudden fevers, and strange rashes.

[900] Though our minds tend to spiral to worst -case scenarios, it's usually nothing, but But for an unlucky few, these unsuspecting symptoms can start the clock ticking on a terrifying medical mystery.

[901] Like the unexplainable death of a retired firefighter, whose body was found at home by his son, except it looked like he had been cremated.

[902] Or the time when an entire town started jumping from buildings and seeing tigers on their ceilings.

[903] Hey listeners, it's Mr. Ballin here, and I'm here to tell you about my podcast.

[904] It's called Mr. Ballin's Medical Mysteries.

[905] Each terrifying true story will be sure to keep you up at night.

[906] Follow Mr. Ballin's Medical Mysteries wherever you get your podcasts.

[907] Prime members can listen early and add free on Amazon Music.

[908] What's up, guys?

[909] It's your girl Kiki, and my podcast is back with a new season, and let me tell you, it's too good.

[910] And I'm diving into the brains of entertainment's best and brightest, okay?

[911] Every episode, I bring on a friend and have a real conversation.

[912] And I don't mean just friends.

[913] I mean the likes of Amy Poehler, Kell Mitchell, Vivica Fox, the list goes.

[914] on.

[915] So follow, watch, and listen to Baby.

[916] This is Kiki Palmer on the Wondery app or wherever you get your podcast.

[917] We are supported by Masterclass.

[918] With Masterclass, you can learn from the world's best minds anytime, anywhere, and at your own pace, Monica.

[919] You can learn storytelling and humor from a previous guest of ours, David Sedaris.

[920] Amazing.

[921] Improve your photography skills from Annie Leibowitz or learn the art of home cooking from Alice Waters.

[922] With over 100 classes from a range of world -class instructors, that thing you've always wanted to do is closer than you think.

[923] My newest one because, you know, I'm so into cooking is Aaron Franklin teaching Texas -style barbecue.

[924] Mmm, yum.

[925] I mean, how would you ever have access to him?

[926] Now, you could learn how to write anything from a book or a screenplay to just a letter.

[927] Learn how to communicate with your boss or your family, how to make a dinner worthy of a Michelin Star or just how to make really great scrambled eggs.

[928] Whatever you're interested in, there's hundreds of video lessons from 100 plus of today's most brilliant minds available anytime, anywhere on iOS, Android, desktop, Apple TV, Amazon Fire TV, and Roku.

[929] I highly recommend you check it out, get unlimited access to every Masterclass, and as an armchair, you get 15 % off an annual membership.

[930] Go to masterclass .com slash dax.

[931] That's masterclass .com slash dax for 15 % off Masterclass.

[932] I was watching an interview with you, and I was thinking about the idea that Biden might change this.

[933] What is very easy to predict is that if he says starting calendar year 22, we're going to tax capital gains at labor tax rates.

[934] What is certainly going to happen is you're going to see an enormous sell -off by the end of the year, the stock market, so that everyone can take that 20 % tax rate.

[935] So you are going to see billions and billions, maybe a trillion dollars, leave that market.

[936] What are your thoughts on that?

[937] My thought, on that is people are only going to sell off if they think it makes economic sense.

[938] They're not going to sell off if they're going to wind up losing their money and they think the company is going to turn around.

[939] I don't think it's going to be as knee -jerk as that, right?

[940] And Biden's plan, the last time I checked in, was if you have, I think it's more than a million then you're going to pay income from stock at the same level as income from wages.

[941] So it's not everybody that's going to be affected.

[942] So I think it's too timid that is his plan.

[943] And he is the president.

[944] So he gets to have the plan he wants to have.

[945] So people said this in 1986, in 1985.

[946] Well, didn't we have a horrendous crash in 88?

[947] Was that the year?

[948] We had a horrendous crash in 87 because of program trading that had nothing to do with the $86.

[949] Savings and loans scandal.

[950] Is that what fueled that?

[951] No, it actually was, when I say program trading, I mean literally like a computer program was trading and the high sell -off, now they have circuit breakers.

[952] So it won't happen that way.

[953] They'll stop the market.

[954] And we've seen that, like within the last year or so, right?

[955] It just stopped trading stops.

[956] So that was a part of the 87, but it wasn't the tax break.

[957] Yeah.

[958] So investors who want to be able to keep their privilege and this low 20 % rate always talk about gloom and doom.

[959] Oh, it's going to be the worst thing ever.

[960] It's like the real estate lobby that when you start talking about repealing the mortgage interest deduction, for example, they go, oh, it's going to be this awful thing.

[961] Home values are going to crash.

[962] Well, here's what we know.

[963] The Trump tax cuts by expanding the amount of.

[964] the standard deduction that people who don't itemize can take.

[965] So every taxpayer gets a choice.

[966] You add up all the deductions the tax law allows and you get that amount.

[967] And then you compare it with the government standard deduction amount.

[968] And whichever one of those is higher is the one you use to reduce your taxable income.

[969] Well, the Trump tax cuts expanded the standard deduction so much that right now, only about one in 10 Americans itemized deduction.

[970] One in 10.

[971] So if you have mortgage interest, only if you're the one in 10 are you getting any benefit from it.

[972] So the Trump tax cuts did this and we knew it was going to happen and we heard nothing from the real estate lobby.

[973] Even as I was making the argument, I cannot ignore that it is very very.

[974] very parallel to the original argument of the South, which is half our economy is this slave labor.

[975] This is how America is competing with England and all these other countries.

[976] And we cannot recover if we transition out of this model.

[977] And yet here we are the biggest economy in the world.

[978] So I'm aware of the irony that it is virtually the same argument is that we can't recover from this.

[979] Right.

[980] And of course we can.

[981] Yeah.

[982] Yeah.

[983] Exactly.

[984] Civilization, as we know, it won't come to an end.

[985] We'll be fine.

[986] I want to let you go because you've given so much up to your time, but I want to nerd out for one second on subprime mortgages because this became one of my huge fascinations for I don't know what reason.

[987] I think the big short.

[988] No, it was prior to that.

[989] Yeah, right.

[990] I had written a script about people getting even with the elite, basically.

[991] And so, okay, so when I first was watching the news and we were finding out that all these people had these subprime.

[992] mortgages.

[993] My knee jerk was, well, these people were irresponsible.

[994] They borrowed money.

[995] They knew they couldn't pay back.

[996] That's on them, right?

[997] And then as I learned more and more about it, I learned that, of course, they were being targeted.

[998] They were being sold.

[999] They were being begged to do this.

[1000] And the thing I was mad about them about being that they agreed to something they could not make good on their promise, I then learned that all the subprime mortgage lenders immediately got rid of their responsibility.

[1001] So they bundled those up into mortgage -backed securities, and they sold them to Germany.

[1002] They said, you guys deal with this fucking house of cards, because we know it's going to collapse.

[1003] So then I went, well, now I certainly don't feel bad for the bankers that are holding shitty notes because they knew this was going to happen, hence them bundling them together and getting rid of them.

[1004] And then I learned even the third layer, which drove me insane, which was some people were smart enough to go, all of this is going to collapse, I want a credit default swap.

[1005] What's a credit default swap?

[1006] Well, that's me buying insurance on something I don't even own.

[1007] So they're saying, you know, it was originally, if you had a million dollars of GM stock, you could buy this thing a credit default swap.

[1008] And for $10 a month, you could insure that if that's company ever went completely out of business, you would get them $1 million.

[1009] It's an insurance policy.

[1010] But they allowed people to buy the insurance policy on stuff they didn't even own, which is insane to me. And you talk about that the legislators can't do the tax forms.

[1011] The derivative market is absolutely unexplainable to even the people selling them.

[1012] The instruments are so complicated, no one fucking knows how they work.

[1013] So when I looked at this enormous thing, this 2008 meltdown, and it was really the blame was given to the people who borrowed money.

[1014] And to find out, no, no, no, no, $2 .8 trillion was borrowed against the bullshit thing.

[1015] So the cumulative value of the homes was in the billions.

[1016] The derivative market built on its back was in the trillions, these credit default swaps.

[1017] And I'm like, oh, this whole thing is a racket.

[1018] And then, of course, your work specifically exposed the fact that once again, very disproportionately preyed upon people of color.

[1019] Yes.

[1020] Yes.

[1021] Yes.

[1022] Yes, yes.

[1023] Black Americans with six -figure incomes were given subprime mortgages.

[1024] It's outrageous.

[1025] And actually, some of the banks had to, like, settle lawsuits.

[1026] It was that bad.

[1027] I love Michael Lewis.

[1028] So I read the big short more than once.

[1029] Literally love that book.

[1030] When you read it and you figure out, they didn't know what the hell they were doing.

[1031] Goldman said, all of these companies that you think, oh, they're at the top, they don't know what they're doing.

[1032] It was like, this is so messed.

[1033] If you don't know what you're doing, you shouldn't be selling a security, period, full stop.

[1034] Like when I represented investment bankers, one of the partners said, Dorothy, if you don't understand a deal, don't do it.

[1035] That was like the best advice ever.

[1036] And you had a bunch of people who didn't understand it and they were going to make money and they thought the train was never going to stop.

[1037] And it stopped and it crashed.

[1038] And they took the whole freaking economy.

[1039] AIG and these big companies issuing these credit.

[1040] at default swaps had no idea what they were even selling people.

[1041] They didn't know what they were promising.

[1042] They didn't think about the fact that, oh, a rumor can collapse bear Stearns.

[1043] And we've guaranteed $150 billion that, I mean, what a racket.

[1044] And so you're going to blame the little guy on the street when you've got the people that are supposed to know how it works, don't understand.

[1045] And they all got burned.

[1046] And they're now blaming everyone.

[1047] Oh, yeah.

[1048] And who got bailed out?

[1049] The banks, not the little guys with the mortgages.

[1050] right?

[1051] It's just messed up.

[1052] And I know at some level, the bankers were counting on getting bailed out.

[1053] They're like, yeah, we're too big to fail.

[1054] They're not going to let us fail.

[1055] And that is what happened.

[1056] And by the way, I am in support of them having bailed out the bankers.

[1057] I think we would have seen an apocalypse without that.

[1058] But yes, you can't bail out the bankers and then not bail out the $10 billion.

[1059] You're going to bail out the $4 trillion and not bail out the $100 billion.

[1060] Also, the consequences of all this stuff runs so deep, right?

[1061] Like so.

[1062] many of these people who are affected are now very extreme, Q &ON, people who are so anti -government and critical of the government.

[1063] A lot of this led to that.

[1064] Yeah.

[1065] There's a direct highway from that distrust to all this.

[1066] And I saw it, so I was teaching at Emory in 2008.

[1067] I had students who had jobs that got pulled from them because law firms didn't know what the hell was happening next and they retrenched.

[1068] And it was heartbreaking.

[1069] They did everything right.

[1070] They got the best grades.

[1071] They interviewed.

[1072] They got the job.

[1073] They're really excited.

[1074] And the rug gets pulled out from under them.

[1075] The carnage was vast.

[1076] Yeah.

[1077] Oh, man. Thanks for that.

[1078] Thank God.

[1079] There are watchdogs like you.

[1080] It is so complex.

[1081] Your average person doesn't have an appetite for what really, the mechanics of how all this stuff works.

[1082] Well, I'll tell you a great place to get your arms around it is the whiteness of wealth, how the tax system impoverishes black Americans and how we can fix it.

[1083] I'm really truly grateful that this is the work you do, and I really hope people read this book and really understand the complexity of the systemic racism.

[1084] Every time we think we understand something, there's another layer, right?

[1085] Like, I think the new concept that people are broadly starting to understand is this inherited wealth.

[1086] Like, yeah, if you don't get a house passed to you, that's a big thing.

[1087] You really get a sense that it's all, it's everything, yeah.

[1088] Yes.

[1089] Dorothy, you're radical.

[1090] I love your hair.

[1091] Of course, you're from the South Bronx.

[1092] Thank you.

[1093] And I love that we'll always know your opinion when we're in a room with you.

[1094] Yeah, that's our favorite.

[1095] We need everyone's opinions.

[1096] Yeah, yeah, yeah.

[1097] We like to dance.

[1098] Yes, we dance.

[1099] Oh, yeah.

[1100] That's right.

[1101] We danced a little.

[1102] We danced a little.

[1103] Well, such a great time talking to you, Dorothy.

[1104] Thanks for having me on.

[1105] It was my pleasure.

[1106] Okay, be good.

[1107] Okay, same to you too.

[1108] Take care.

[1109] Follow Armchair Expert on the Wondry app, Amazon music, or wherever you get your podcasts.

[1110] You can listen to every episode of Armchair Expert early and ad free right now by joining Wondry Plus in the Wondry app or on Apple Podcasts.

[1111] Before you go, tell us about yourself by completing a short survey at Wondry .com slash survey.