Opportunity Zones Could Lift a Million People Out of Poverty - Granite Grok

Opportunity Zones Could Lift a Million People Out of Poverty

Opportunity zones

The Democrat Party has talked about lifting Americans out of poverty for over a half-century. Democrat bills have mostly been social safety net programs. They do not attain the results they promise. Democrats are good at promises, bad at results, and follow through.

As Eldrige Cleaver said, ‘If you are not a part of the solution, you are a part of the problem.’ There’s a lot of truth in that statement. The government is not philanthropy. The constitution specifically excludes the government from such efforts. General welfare does not mean we should all be on welfare generally.

Connecting opportunity with communities lifts people out of poverty

The Trump White House is touting “Opportunity Zones” as part of its anti-poverty package. According to an August report, the Council of Economic Advisers estimates the program could lift up to a million people out of poverty. That is an impactful program.

The IRS website says an opportunity zone is, “an economically distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.” Locations can be designated as such “if they have been nominated for that designation by a state, the District of Columbia, or a U.S. territory and that nomination has been certified by the Secretary of the U.S. Treasury via his delegation of authority to the Internal Revenue Service (IRS).”

The program’s creation is part of the Tax Cuts and Jobs Act of 2017.  Housing and Urban Development (HUD) Secretary Ben Carson notes the program was doing even better than expectations. It is drawing $75 billion in investment since it started.

Carson said in an Aug. 24 Foxx appearance, “This $75 billion in two years is remarkable because as the program was put together, [Treasury] Secretary [Steven] Mnuchin and his group predicted $100 billion over 10 years,” “The Council of Economic Advisers also predicts that that will lift one million people out of poverty.”

The report notes that investment slowed in Q2 2020. With the impact of the virus, this reflects a general slowing of investment everywhere.

However, the Council of Economic Advisers still maintains “the initial evidence suggests that the [Opportunity Zone] model has power to mobilize investors; engage State, local, and tribal stakeholders; and improve the outlook for low-income communities — all with limited prescription from the Federal Government.”

The program faces criticism from Democrats. They say the investment favors wealthy developers. Yet, Democratic presidential nominee Joe Biden wouldn’t do away with it. According to The Real Deal website, Biden would modify the Opportunity Zone program. He’d make three major alterations to the program.

  • First, he would change the program’s incentives to get investors to work with community organizations. This would force investors to work through politically favored non-profits. The investment would be less profitable. The socialist politics will be paid for on the back of another government program. None of the adjustment helps the community.
  • Second, he would “ensure these tax benefits are only being allowed where there are clear economic, social, and environmental benefits to a community…” The change seems simply more control and less results. It further siphons off funding to Leftist non-profits. It pays Democrat friends and patrons.
  • Third, he would force detail reporting about the impact of the investments, including “the impact on local residents, including poverty status, housing affordability, and job creation.” Regulatory and reporting burden are Democrat necessities. They have never helped the poor.

Democrats will keep Opportunity Zones if the government is directing the traffic but there’s a reason the Opportunity Zones have been successful thus far. The government isn’t directing traffic.

Getting government out of the way is the solution to the problem of poverty. Trump gets it, Democrats don’t.