Democratic bill would repeal “Opportunity Zones” created by Republicans in 2017 to invest in low-income communities
Did a provision in President Trump’s tax reform law reward the rich more than the poor it was ostensibly created to help?
Context
As part of 2017’s Republican tax reform law, Sen. Tim Scott (R-SC) inserted a provision nicknamed Opportunity Zones. These low-income areas have been specifically targeted as needing development and investment. About 35 million Americans live in 8,700 designated “Opportunity Zones.”
Since then, a series of New York Times articles during the summer and fall exposed how — since their creation — Opportunity Zones often benefitted wealthy Trump donors, went towards projects in affluent neighborhoods, or went towards projects which had already been approved before the Zones’ creation.
What the bill does
A new bill, introduced by a member of the prominent House foursome known as “the Squad,” would eliminate Opportunity Zones from the federal tax code.
It was introduced in the House on November 22 as bill number H.R. 5252, by Rep. Rashida Tlaib (D-MI13).
What supporters say
Supporters argue that the provision created in 2017 failed to live up to its intended purpose.
“The American people have been scammed by Opportunity Zones,” Rep. Tlaib said in a press release. “Opportunity Zones were supposed to help uplift low-income communities and those living in poverty, but instead we are seeing them benefit billionaires and their luxury projects.”
“The current Opportunity Zone law fails to drive real benefits to low-income communities, instead often rewarding President Trump’s donors,” Rep. Tlaib continued. “We must repeal them to stop yet another form of corporate greed from hurting our communities and tarnishing our democracy.”
What opponents say
Opponents counter that Opportunity Zones economically assist disadvantaged areas.
“In order to revitalize these areas, we’ve lowered the capital gains tax for long-term investment in Opportunity Zones all the way down to a very big, fat, beautiful number of zero. Zero,” President Trump said in an April speech at the Opportunity Zone Conference..
“That’s why they’re looking and they’re saying, ‘No, I don’t want to go there. Maybe I don’t love the location. I don’t want to go,’” Trump continued. “And then they hear about the zero, and they’ll say, ‘I think I’m going to go there.’”
Odds of passage
The bill has so far attracted one Democratic House cosponsor: Rep. Pramila Jayapal (D-WA7). It awaits a potential vote in the House Ways and Means Committee. Odds of passage are low in the Republican-controlled Senate.
It’s unclear if the bill could even pass the Democratic-controlled House. Opportunity Zones were one of the only components of 2017’s tax reform which received Democratic support. (Although many in the party have begun to shift their position, as the results have begun accumulating from what was in 2017 a theoretical idea.)
This article was written by GovTrack Insider staff writer Jesse Rifkin.
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