Joint Economic Committee Holds Opportunity Zones Hearing
The congressional Joint Economic Committee (JEC) recently held a hearing to consider the potential positive impacts that Opportunity Zones tax incentives, enacted in the Tax Cuts and Jobs Act of 2017, could have for low-income communities. The Opportunity Zone program is intended to spur investment in distressed communities by allowing taxpayers specialized tax treatment, including deferred capital gains, for investments in Opportunity Funds, which must in turn invest at least 90 percent of their assets in businesses located in qualified Opportunity Zones.
The testimony focused on the need for guidance from the Internal Revenue Service (IRS) and the Treasury Department on Opportunity Zones, including how this tax incentive can be used in conjunction with the LIHTC and the New Market Tax Credit. The participants noted the potential transformative power of Opportunity Funds. “Because there is no cap on the amount of money that can be invested into Opportunity Funds, they have enormous potential to revitalize communities. If even a fraction of the estimated $2 to $6 trillion of unrealized capital gains held by individuals and corporations were directed into effective Opportunity Funds, to finance affordable homes and invest in businesses creating living-wage jobs, the results could be transformative,” writes Terri Ludwig, CEO of Enterprise Community Partners and one of the witnesses at the hearing, in an opinion piece for thehill.com.