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America's wealth gap is split along racial lines — and it's getting dangerously wider

Between 1983 and 2013, the average black household in America gained $18,000 in wealth — the sum total of everything they owned, from retirement accounts to houses.

Over the same time period, the average white family gained $301,000. (Both are in 2013 dollars.)

The data, from new report called "The Ever-Growing Gap," shows something incredibly important about racial inequality in the United States: that American policies — and politicians — made it easier for the rich to accrue wealth, compared with the poor.

And it shows it's impossible to untangle wealth disparities from race, because America has had systemically racist policies that widened this gap between white and black, and thus between rich and poor. There's a reason America's poor are largely people of color.

(Many readers asked why Asians were left out of the study. It's because grouping all Asian Americans and Pacific Islanders into one category "obscures the different economic realities" of the many Asian ethnicities. In other words, Asian as a label is often too broad to provide meaningful data.)

But the report also projects wealth inequality 30 years into the future — and it shows that at our current pace, we're headed toward a scary scenario.

Let me explain by making some charts for you. First, tell me your household wealth.

Use this diagram to figure out how to calculate it.

Now enter your best estimate below. (Don't worry, I'm not collecting your data.)

Why wealth is more important to talk about than income

Income is the amount of money you bring in. And data shows the poor are earning less money and the rich are earning more.

But what's perhaps more important than income is wealth. It's what allows families to keep money and assets in their possession.

It's what helps people climb the socioeconomic ladder — things like buying a new home in a nicer neighborhood, which is something black families haven't been able to do since the civil rights movement.

This is especially sad because research shows that a good neighborhood can make all the difference. It affects everything from your future earnings to your personal health — even your mental state.

But in the past, the federal government actively made it harder for minorities to accrue wealth.

For example, the government created the Federal Housing Authority in 1934, which helped families secure home loans. But the feds refused to back loans for black people — and even rejected those who wanted to live around black people. This practice, called redlining, meant black people couldn't invest in the same real estate that white people could.

The authors of this report point out several other examples of policies that made it hard for minorities to build wealth:

So it shouldn't be a huge surprise that people of color are at a disadvantage, or that people of color make up a disproportionate amount of poor people in America.

Beyond the moral reasons, there's a practical reason why it's bad to have this kind of wealth inequality, even for the rich.

Federal Reserve Chair Janet Yellen testified to Congress that this widening gap is a "very disturbing phenomenon" because higher-income households spend less of their money than lower-income households. So if America's wealth is being funneled to the top, then less money is being spent.

This isn't just about working harder. It's about huge, national policies.

Americans have always believed that with hard work, they can get ahead — especially when the economy is good.

But if you've ever played the game Monopoly, you know that it's much easier for people with more money to build more hotels — and to get even more money.

It's not the perfect analogy, but it shows that if we're going to close this gap, we need policies that help middle- and lower-income Americans accrue wealth — especially minorities, who have historically suffered most under policies that helped white people hold on to their wealth.

Think of it this way: It's like playing a game of Monopoly where some people weren't allowed to collect $200 when they passed Go — and then resuming the game and saying everyone has a fair shot to win.

So what can we do?

The authors of the study have several policy proposals, all with varying approaches.

One way to think about closing the gap is to find ways to help people save money. For example, the authors suggest giving poor and minority families a simple, safe, and affordable retirement product. Another suggestion is starting off all kids with a small children's savings account for their education.

Other proposals blend the idea of savings with government subsidies. For example, making more people eligible for the earned income tax credit will give more money to the poor — but the authors also proposed incentivizing people to save a portion for later in the year, in case of emergencies.

They also suggest changing the way tax benefits work for homeownership, and helping people buy first homes instead of helping the wealthy buy second homes.

One idea that is politically charged right now is enforcing a more robust estate and inheritance tax — the money government takes away when you die and leave it for your heirs.

Right now only estates worth more than $5.45 million in 2016 are subject to this tax, which means only rich households pay it. Donald Trump has proposed getting rid of the tax entirely, which would exacerbate the wealth gap.

Meanwhile, the authors of the report go in the opposite direction and say that taxing smaller estates, and gradually increasing rates as the estates get larger, would generate more tax revenue and decrease this wealth gap.

If these proposals sound familiar, it's because many politicians have echoed them in various ways — but not necessarily in the context of the alarming increase in wealth inequality, and not necessarily with the urgency that one might expect.

And if we fail to do something? Well, it's kind of like the final few moves of Monopoly.


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