What’s going on?
A provision in the tax overhaul plan that President Donald Trump signed into law last month opens a door for venture capitalists to invest in impoverished areas where people need jobs.
How does it work?
The law introduces “Opportunity Zones,” designated areas where businesses can avoid capital gains taxes. The idea is to incentivize venture capitalists and corporations to invest in communities with sluggish growth and high poverty.
Why didn’t I hear about this earlier?
Republican leaders and the White House failed to promote this section of the bill; the “opportunity zones” plan was tucked away on Page 130 of the tax reform law. The zones were first introduced last year by Sen. Tim Scott (R-S.C.) and co-sponsored by several Democrat lawmakers at the time.
“I had to explain it several times to folks,” Scott told the New York Times. “I came out of one of these communities, so I believe that there’s untapped potential in every state in the nation.”
If this provision is “the government actually cracking open a window of opportunity for private businesses to do what they’re best at,” then it’s great news. It’s time to get out of the way of American businesses and let them improve quality of life for communities that have been struggling for way too long.
EDITOR'S NOTE: This article provided courtesy of TheBlaze.
MANDEL NGAN/AFP/Getty Images
This is a rush transcript and may contain errors.
GLENN: Wow, was that Republican back tax plan evil or what? And if you did get a raise or a bonus or anything, those are just crumbs. At least those are the lines from the Democrats that the plan is all about lining the pocket of the companies and rich people. Although, in California, they’re trying to claw all that money back and trying to tax the companies on all of the profits that they — that they now get to keep because of the federal income tax.
Trickle-down economics. It’s a myth invented by Republicans to make you just poor and miserable. Democrats have repeated basically the same line since Andrew Jackson, and I’m not kidding.
And the media has helped them repeat that message over and over and over again. And our so-called educational institutions are just feeding that nonsense to our children day and night.
Now, I want to make sure everybody understands. I mean, I — I mean, you know, the tax plan was not some genius, oh, my gosh. Look at this. A real overhaul. It was a mediocre plan that could have been a lot better. But I will take it, and I will celebrate that we have it. But let me point out one part of the tax plan that’s really good, that nobody has really talked about. And it’s designed to help some of the most economically depressed areas in the country. It’s a stealthy part of the tax plan. It’s buried on Page 130 of the bill. And it allows states to designate certain regions within the state borders as an opportunity zone.
Now, these are the areas with high poverty, unemployment, slow business growth.
And what this tax plan does, it allows businesses and venture capitalists to invest long-term in these opportunity zones. And by doing it, they can save a ton of money through avoiding capital gains taxes. This is really good. This is how this works.
Over the last five years, the US economy has grown and at jobs. But the growth has been mostly in large cities. From 2010 to 2014, prime Obama years, more businesses closed in rural America than opened.
You know Democrats, if you would just hear that, you might start to figure out why Donald Trump won. There’s another reason.
Now, with this and the new tax plan, investigators will be able to create opportunity funds for these zones around the country and cede new businesses. Expand existing businesses or develop real estate.
If the investors maintain their investment for ten years, they avoid paying capital gains taxes altogether.
That is gigantic. The chairman of President Trump’s council for economic advisers said, if this plan works, quoting, we’ll look back ten years from now and say this is one of the most important parts of the tax bill. And nobody really even talked about it.
Plenty of ways to be cynical about a provision like this. Maybe it’s a corporate scheme to take rural America for a ride while avoiding taxes.
Or maybe it really is what it sounds like. The government actually cracking open up a window of opportunity for private businesses, to do what’s — you know, what they’re best at. And the process helps parts of the country that really need the boost.
What a concept.