One GOP senator’s plan to save rural America
A little-noticed element of the 2017 tax cut law now rolling out across the U.S. would allow investors to defer capital gains taxes for up to a decade if they invest their cash in rural and small-town communities largely left behind in the recovery from the Great Recession.
And at least one Republican senator believes the program, known as Opportunity Zones, could make lives better for as many tens of millions of Americans.
“In the Opportunity Zones, the poverty rate is over 30 percent,” Sen. Tim Scott (R-S.C.) said in a recent interview featured on the latest edition of the POLITICO Money podcast. “I look at it from a common-sense perspective and I ask myself, ‘Is there a way for me to positively impact the lives of 50 million Americans by providing an incentive to unlock investments for those areas?”
“What I have tried to do is create a program that is not a government-centric program, but that does create an incentive for people to take a second look at parts of the country that have been missed by the economic recovery that we’ve experienced over the last few years,” Scott said.
The Opportunity Zone program, initially championed by a think tank founded by Facebook and Napster billionaire Sean Parker, won support from several Democrats before appearing in the tax cut bill signed by President Donald Trump in December 2017. Critics are concerned that investors simply looking for a lower tax bill could abuse the program.
But Scott said he believes the program could direct as much as $100 billion in investment to create jobs outside major metro areas that are already thriving.
“I am certainly an advocate of the free market, without any question,” he said. “However, my worldview, really, is oftentimes seen through the eyes of a 7-year-old kid, growing up in a single-parent household, mired in poverty, feeling hopeless, at times frustrated, realizing that there was more potential in me than I could get out.”