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August 03, 2022

Annual 2022: Solutions to racial wealth gap explored

It’s no secret that a racial wealth disparity has plagued America since the days of slavery, but few workable solutions have materialized.

The 2022 American Bar Association Annual Meeting Showcase program “The Forgotten 40 Acres: Repairing Racial Wealth Disparity Using the Estate Tax and New Charitable Incentives” will feature a panel of experts discussing the history of failed government efforts to address past discrimination of underrepresented Americans, as well as new approaches to the idea of making reparations. The Friday program is at 3:30 p.m. CDT at Hyatt Regency Chicago, East Tower, Ballroom Level, Grand Hall I.

“All of our country’s current racial unrest and wealth disparity is inextricably linked to the institution of slavery and the centuries of injustice that followed,” said estate planning lawyer Sarah Moore Johnson, a partner at the law firm Birchstone Moore in Washington, D.C., who has studied the issue extensively and will serve as moderator.

Efforts for reparations span decades. Legislation was first introduced by the late U.S. Rep. John Conyers of Michigan in 1989, but it did not pass. The bill, H.R. 40, has been introduced in every Congress since.

Finally, in April 2021, a version sponsored by U.S. Rep. Sheila Jackson Lee of Texas was voted out of committee for the first time in its history and now has a chance to be voted on by the House of Representatives. The bill would create a commission to study a national apology and reparations for slavery, racial and economic discrimination, and the impact on living African Americans.

Other ways to advance compensation are also gaining momentum.

Johnson and tax attorney Raymond C. Odom, senior vice president of The Northern Trust Company in Chicago, began discussing the idea of using proceeds from the federal estate tax to fund reparations to Black Americans back in the summer of 2020, after a committee meeting of the American College of Trust and Estate Counsel, where they both serve as fellows.  

Odom and Johnson, along with colleague Vanesa Brown of Bessemer Trust, developed a presentation initially called “The Forgotten 40 Acres: How Real Property and Probate Laws Contributed to the Racial Wealth Gap and How Tax Policy Could Repair It,” which they first delivered at the 33rd Annual Real Property, Trust and Estate CLE Conference in April 2021. The presentation was so well received that Johnson and Odom were asked to give it nearly a dozen more times during the pandemic to various audiences of legal and wealth planning professionals across the country, Johnson said. 

To kick off the panel discussion, Odom and Johnson will offer a history of the racial wealth gap in the United States, including the grant of 40 tillable acres to each freed family issued by General William Tecumseh Sherman’s Special Field Order No. 15 in 1865, near the end of the Civil War. President Andrew Johnson’s subsequent reversal of the order was a significant blow to wealth-creating opportunities for the formerly enslaved. 

The federal government later denied additional wealth creation opportunities for Black Americans through the New Deal and the G.I. Bill, which granted home ownership opportunities and incentives to white Americans, but not their Black counterparts. 

It is Odom and Johnson’s ideas for funding reparations that make this program unique.  Not only would the federal estate tax be earmarked for reparations, but the two propose new charitable incentives, including a new type of charitable organization called a “501(c)(40) Reparations Organization” that would provide increased tax incentives to create a private-public partnership for repairing the racial wealth gap. 

Other panelists joining the conversation are Donald K. Tamaki, senior counsel at Minami Tamaki LLP in San Francisco, who also is a member of the California Reparations Task Force and was involved in the case that led to reparations for Japanese American citizens.

“Don has been down this path before, so he’ll talk about the challenges ahead,” Johnson said.

The fourth panelist is Tonia Wellons, president and CEO of the Greater Washington Community Foundation. Wellons has 20 years of experience in public and private partnerships, financial access and inclusion, and international development.  She will explain how a privately funded reparations program could successfully lift up Black communities and affected individuals. 

Johnson said she never thought her career as an estate planning lawyer would lead her to work on this issue. “It just goes to show that social justice is not reserved for civil rights lawyers.”

She said she hopes attendees leave the session with new knowledge about a part of American history that’s been forgotten and get excited about the possibilities that lie ahead. “As lawyers, we can help further action to address a part of our country’s history that needs to be repaired.”

This program is sponsored by the ABA Real Property, Trust and Estate Law Section and co-sponsored by the Civil Rights and Social Justice Section and Section of Taxation.