This Federal Budget Will Widen the Racial Wealth Divide

By LaToya B. Parker, Dedrick Asante-Muhammad |

( Otherwords.org) – The House recently passed a massive Trump budget bill that will cut trillions in taxes for the ultra-wealthy while eviscerating Medicaid, SNAP, and other services for working Americans. It now moves to the Senate.

This bill has been called a massive transfer of wealth from the poor to the rich. It will also entrench racial economic inequality, subsidizing dynastic wealth for the majority white top 0.1 percent while defunding the public-sector jobs and benefits that have long sustained the Black middle class.

Among other tax breaks for the wealthy and corporations, this bill eliminates the estate tax for ultra-wealthy households. The federal estate tax currently applies only to estates worth more than $13.99 million per individual (or $27.98 million per couple) in 2025. That’s just 0.1 percent of estates. Repealing the estate tax would cost the federal government billions in lost revenue and benefit only the very wealthiest households.

Racially, the impact is stark: Black families hold less than 5 percent of U.S. wealth, despite making up over 13 percent of households. And the median white household has 10 times the wealth of the median Black household. Repealing the estate tax would be a massive wealth transfer to the already wealthy, doing nothing for the 99.9 percent of Americans — especially Black households — who are far less likely to inherit wealth.

To offset the cost of these massive tax breaks for the wealthy, the bill slashes all kinds of programs that working Americans rely on. One particularly cruel cut is to reduce benefits for federal employees and gut civil service protections. These changes threaten one of the most secure avenues for Black economic progress — government employment — for “savings” of just over $5 billion a year in a bill that will cost trillions.

Today, Black employees make up 18.7 percent of the federal workforce. This is no accident — it reflects decades of civil rights gains, anti-discrimination laws, and the promise of fair hiring. Federal jobs have long provided higher wages, stronger benefits, and greater job security for Black workers than much of the private sector.

Image by wal_172619 from Pixabay

Nowhere is this more evident than in the D.C.-Maryland-Virginia (DMV) region — the epicenter of the federal workforce. Across the DMV region, more than 450,000 federal workers are employed. Black workers account for over a quarter of federal workers in D.C., Maryland, and Virginia alike.

This corridor has long been a cornerstone of Black middle-class advancement. It’s where federal jobs have helped Black families build generational wealth, send children to college, and retire with dignity.

In the South as well, where Black workers face the nation’s largest racial wage gaps and persistent barriers to private sector advancement, federal employment has provided a crucial counterbalance. Well over a third of federal workers in Mississippi, Alabama, South Carolina, and Louisiana are Black — along with nearly 44 percent in Georgia.

These figures reflect more than representation — they underscore federal employment as a stabilizing economic force in Black communities.

Federal retirement benefits — including pensions and annuities — are a rare form of guaranteed income in retirement. For Black workers who still face the racial wealth divide as a barrier to economic security, these benefits are foundational. Nearly half of Black families have zero retirement savings, making federal pensions critical to avoiding poverty.

Together, these policies amount to a reverse wealth transfer: enriching wealthy heirs while undermining public servants. Instead of gutting benefits and eliminating the estate tax, we should invest in the systems that have historically offered a path forward for Black workers — and workers of all colors — and develop policies that would expand these wealth-building programs beyond government employment.

This isn’t just a policy question. It’s a question of national values.

Via Otherwords.org