Trump Signing Executive Order Aimed at Improving Low-Income Communities
With the second year of his administration nearing completion, President Trump seems to be keeping his focus on the underprivileged. Chaired by the Secretary of Housing and Urban Development, Ben Carson, the President is signing an Executive Order establishing a new council that will look to improve revitalization efforts in what have been designated “Opportunity Zones” by the Tax Cuts and Jobs Act. The White House Opportunity and Revitalization Council, made up of 13 Federal agencies, will work in tandem with local governments on ways to improve results of taxpayer investment in these areas. Their goal is to improve efforts by removing barriers and some of the red tape involved in existing Federal programs, as well as improving coordination between agencies.
This new council aims to increase results by not only streamlining current government processes, but also compiling reports highlighting areas in need of improvement, with the ultimate goal being legislative proposals designed to encourage private investment. The “Opportunity Zone” designation established by his Tax Act in 2017, includes incentives for long-term investment in low-income communities in the form of capital gains tax relief. “Opportunity Zones” are expected to encourage upwards of $100 billion in private investment.
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The communities designated “Opportunity Zones,” have an average family income 37% lower than the state median and poverty rates nearly double the national rate of 17%. 8,761 communities, with a cumulative population of 35 million citizens, bear this designation.
The current issues faced when investing in low-income communities create numerous challenges for investors. After all, when it comes to business, it’s all about location. It takes a focused plan coupled with long-term commitment to be effective. If you were looking for the best place to open a restaurant, would you look at more depressed areas or would you look at prosperous neighborhoods, with plenty of disposable income. It’s an obvious choice, which is why so many communities face such a tough uphill battle. The longer a community goes without new investment, the worse the problem gets with higher unemployment rates caused by the loss of business. Long-term community revitalization has to start with job creation, the more people you get working, the more customers you have in an area. With new jobs comes greater income, lower unemployment and higher spending. It creates a snowball effect, but it takes time to get that snowball rolling, first you have to climb the hill.
This new council aims to attack this issue head-on, giving potential investors tax breaks to get established is great, but streamlining the process makes it that much more appealing. This council was designed to address the lackluster effect the Tax Cuts and Jobs Act had on low-income communities. Now, with added incentive, it’s just a matter of time before private investors see the opportunity and seize it.
This new council could be seen as a grasp for straws; an attempt to garner support in low-income communities where republicans continue to do poorly in elections. In reality it is one of this administration’s most important, yet widely overlooked steps toward achieving some of President Trump’s campaign promises. These communities continue to be left behind, with no attraction to outside, private investment. This is a real opportunity, not only for investors, but for the millions of people who live in these communities, struggling everyday to find work. An influx of outside investment spurring job creation in areas that have continued to see job loss, will have a major impact on not only their communities, but on the U.S. economy as a whole. More people with more money means more spending both locally as well as nationally via avenues such as internet shopping, creating higher demand which calls for more production nationwide. Adding these 35 million additional consumers will be a real shot in the arm for our country.
Sadly, news like this doesn’t make the headlines, it’s not juicy and most importantly it’s hard to paint the Trump administration in a bad light when the focus is on improving the lives of everyday Americans living in low-income communities. This is a huge step forward for our economy, but it will take time and commitment. The good news is, realizing a need for a special council is great sign that this administration isn’t just about headlines and tax cuts, it’s about real, tangible results.
