You won’t find much attention on this development from the disgustingly hateful and divisive mainstream media.
President Donald Trump has just launched a new interagency-wide council to help funnel federal spending into the designated low-income zones created in last year’s tax bill.
These zones, called “opportunity zones” were originally brainstormed by Kentucky Senator Rand Paul, who loved the idea of lowering taxes in impoverished inner city communities to encourage businesses to invest where opportunity has often seemed sparse.
Black leaders from inner cities recently met at the White House to thank president Trump for his leadership.
Trump issued an executive order Wednesday creating the interagency White House Opportunity and Revitalization Council, to be spearheaded by Housing and Urban Development secretary Ben Carson.
The council will span a dozen federal agencies, with the goal of putting Opportunity Zones at the forefront of funding in areas like small-business finance, water and broadband infrastructure, rural development, and crime enforcement.
“The resources of the whole federal government will be leveraged to rebuild low-income and impoverished neighborhoods that have been ignored by Washington in years past,” Trump said as he signed the order. “With Opportunity Zones, we are drawing investment into neglected and underserved communities of America so that all Americans, regardless of zip code, have access to the American Dream.”
“Qualified Opportunity Zones” are newly designated economically depressed areas, delineated by local government officials and approved by the Treasury Department.
Under a provision in the December 2017 tax bill, investing in these zones results in hefty tax benefits, thus encouraging investment. If investors pour capital gains into real estate or business equity in such an area, they reduce the tax basis on that original capital. Any gains generated by the Opportunity Zone investment can be tax-free if held long enough.
Opportunity Zones are largely based off of a similar idea thought up by Sen. Rand Paul, whom had been calling for “economic freedom zones.” that would give tax cuts to impoverished communities.
The program is intended to help revitalize areas of America that unlike New York, Los Angeles, and San Francisco, didn’t quite bounce back from the financial crisis.
This program seems to be a source bipartisan collaboration in an otherwise polarized Washington, as the administration works more directly with state and local government officials seeking to capitalize on the program.
Many of the Opportunity Zones overlap with well-heeled areas that probably don’t need the boost. But in the impoverished areas the zones are meant to target, they shall serve as a great catalyst for growth.
One criticism, however, is that residents of the targeted area may be less likely to be holders of capital gains and so are potentially able to reap the benefits. Yet economic development in general will progress nonetheless as real-estate development ramps up, pushing forward development that would have otherwise have taken many years. Residents unable to pay rising property taxes will be far more quickly displaced.
Part of the new executive order is designed to help with this. The new council, assisted by the Council of Economic Advisers at the White House working with Treasury and Commerce, may craft ways to collect and measure the data around capital flows and what impact the program has on economic growth and job creation in a given area,
The White House’s move Wednesday to increase its participation gives the administration a greater stake in the program’s success, as well as another opportunity to show they are making a difference in helping poorer communities.