Viewpoint: Amid a Crisis of Inequality, $2 Trillion of Tax-Free Investing in Opportunity Zones Could Benefit Both Rich and Poor
Tuesday, May 7, 2019
By R. Paul Herman and Noah Strouse
How can a formerly failing freshman in a South Carolina high school ultimately build a path to prosperity for millions of poor people nationwide? Through the U.S. tax code, of course.
Born into poverty in North Charleston, South Carolina, and raised by a single mother, Tim Scott struggled economically and educationally early in life, like many of the 39 million low-income Americans facing a poverty threshold of $25,750 per year for a family of four. Ultimately, Scott found a mentor, graduated high school and college, built a business and subsequently served on the city council and in the state legislature, and became the only African-American to become both a U.S. Representative and Senator.
In late 2017, Sen. Scott (R-South Carolina) co-sponsored with Sen. Cory Booker (D-New Jersey) an innovative addition to the Tax Cuts and Jobs Act, whereby 8,700 low-income census tracts called Opportunity Zones could benefit investors with unrealized capital gains to sell existing investments and re-invest those gains in new ventures, business expansions and real estate in high-poverty areas.
Photo courtesy of Jason Mrachina.