Discrimination in Taxation?
by Sabreena Khwaja
As the Texas midterm election session begins and ends, Texans hear a number of promises by candidates and potentially elected authorities regarding major policy issues. One of these issues is property tax rates. Some candidates make promises of making the largest property tax cuts in history, while others swear to ensure more tax transparency. However, studies suggest that there is a large injustice that has yet to be confronted. The economic catastrophe caused by the pandemic, as well as growing racial movements in recent years, is bringing attention to a problem that has troubled black and Hispanic people for ages: discriminatory property tax assessments.
The policy issue of property tax rates coupled with the prevalent social issue of racial discrimination have allegedly created a problematic trend in US cities. Texas has no broad state property tax, meaning it is up to local taxing units in each county to determine tax rates. This can pave the way for taxing entities to unjustly burden certain groups of Texans with higher tax rates than others. A study covering 118 million homes in the US found that “within the same tax jurisdiction, black and Hispanic residents bear a 10–13% higher property tax burden than white residents” (Avenancio-Le´on & Trump). This fact is not so hard to believe, as inflated property tax rates were used in the Jim Crow South to punish Black homeowners and churches that protested against racial injustice by boycotting white businesses or holding civil rights meetings. In modern times, whether it is racially motivated or not, it is argued that black and Hispanic homeowners still carry the burden of these inflated rates (Teresa).
An analysis of property tax and demographic data from the 2010 Census, the 2020 Census, and the Texas Comptroller’s Office revealed that, overall, Texans do not seem to fall victim to the discriminatory taxes observed in the US. The data takes a close look at the top 50 Texas counties with the most positive population change, the African-American and Hispanic population changes between 2010 and 2020 for each, as well as the property tax rate changes between 2010 and 2020. The data showed essentially no correlation between African American & Hispanic population changes and property tax rates. A similar look at white population changes in Figure 4 displayed no relation to property tax rates. Figure 1, which solely accounts for the Hispanic population change in Texas counties, as well as the respective property tax rates in each county, exhibits a steady rate of Hispanic population increase. The data shows that all points, except a few outliers, demonstrate a population increase of about 50%, however the property tax rates do not follow a solid trendline. It looks as if they are randomly assorted.
Figure 3, which shows the overall population change in Texas counties for Hispanics and African Americans, shows no discernible correlation between the two. If anything is to be interpreted from the trendline in Figure 3, it is actually the opposite of what was hypothesized in the above paragraph. The trendline in Figure 3 indicates that property taxes have actually decreased in counties with higher African American and Hispanic population increases. However, it can be argued that the data does not show a strong enough correlation for that to be determined.
So, if the research does not prove so, why does it seem that in many cases black and Hispanic people pay more in property taxes than white people? One theory, with respect to the research included in this paper, is that Texas has a lower concentration of black and Hispanic people compared to other states in which taxation discrepancies have been detected, such as Illinois, for example. A higher concentration or higher rate of positive population change of black and Hispanic individuals in Texas counties may have shown higher tax rates because the white population would have less of an influence on the overall rate. In order to understand the next hypothesized reason, it is important to acknowledge that African Americans and Hispanics are economically disadvantaged groups and have increasingly high poverty rates. Much of this can be blamed on racial disparities in income, amongst other factors. This means that low-income neighborhoods are generally home to these racial groups. The result of this fact is that the values of their homes grow much slower compared to those in white neighborhoods. Census Bureau data from 1980 to 2015 “homes in white neighborhoods appreciated in value, on average, almost $200,000 more than comparable homes in neighborhoods of color” (Howell & Korver-Glenn). The white people that constitute the majority of home buyers have a tendency to steer clear of minority-majority neighborhoods, which greatly reduces the amount of potential buyers for black sellers. Consequently, the sale price of homes in African-American and Hispanic neighborhoods goes down. The assessed value of a home in such a neighborhood will be much greater than its market value. In other words, the minority-owned homes will face a skyrocketing tax on the assessed value, but will not reap the benefits of a high value property. This is the opposite for homeowners with homes that increase more in value than assessments because they may take advantage of a tax break.
With soaring property taxes and a regressive taxing method, more specifically a value assessment method, Texas policy must especially ensure that taxation is fair and just for all Texans. While research has not proven racial discrimination in tax rates to be a prevailing issue in Texas, there still exists the problem of discrepancies in tax assessments, which have often proven to be results of underlying racial issues. Policy analysts have come up with an effective solution, entitled the “Flat-Dollar Homestead Exemption”, which would essentially lower a homeowners property tax bill by reducing the assessed value of a home by a fixed amount for all homeowners in a district. This would especially help middle and lower class families by diluting the amount they pay, regardless of the appraised value of their home. Texas has passed legislation to alleviate some of the burden property taxes cause, one of them being House Bill 3 (HB 3). HB 3 allows certain individual school districts to reduce their tax rates under some conditions (Villanueva). This bill is a step towards more fair taxation as it puts out more investment from the state into education, consequently reducing the tax bill in the respective district.
Inconsistency in property taxing with respect to minority-majority communities in Texas is an issue worth researching, as doing so can make the state a more equitable place to live for all. Though research does not show a strong correlation between African-American & Hispanic or white population changes and property tax rates, policy should strive to close other race-related assessment gaps. Legislation should still reflect aims of ensuring that minorities do not pay more than their fair share of property taxes in relation to their white counterparts. Doing so would constitute a better, more fair Texas.
Avenancio-Le´on, Carlos and Trump Howard. “The Assessment Gap: Racial Inequalities in Property Taxation” The Washington Post | June 2020,
Howell, Junia, and Elizabeth Korver-Glenn. “Race Determines Home Values More Today than It Did in 1980: Kinder Institute for Urban Research.” Kinder Institute for Urban Research | Rice University, 24 Sept. 2020,
Villanueva, Chandra Kring. “There’s a New School Finance Law in Texas… Now What?” | The Center for Public Policy Priorities
Wiltz, Teresa. “Black Homeowners Pay More than ‘Fair Share’ in Property Taxes.” Black Homeowners Pay More Than ‘Fair Share’ in Property Taxes | The Pew Charitable Trusts, The Pew Charitable Trusts, 25 June 2020,