Getting any kind of substantive legislation passed by Congress and enacted into law is incredibly difficult in the modern age. Relatively little of substance was enacted by the 115th Congress between 2017 and 2019 – the most glaring exception being the 2017 Tax Cuts and Jobs Act. While many of the provisions such as those changing individual and corporate tax rates were highly publicized and debated, one provision that received little attention at the time allowed special tax treatment for investments in what were called opportunity zones, areas of the country that were economically disadvantaged.
One of the extraordinary aspects of the opportunity zone provision is that its inclusion was largely the result of a sophisticated lobbying effort funded by Scott Parker a Silicon Valley billionaire who was able to enlist the support of two prominent African American Senators, Democrat Cory Booker, and Republican Tim Scott.
The theory behind the legislation was that by providing special tax breaks to investments in certain left-behind communities, a flood of private investment would rush in and bring about the kind of development that years of government efforts had failed to produce.
So how did Parker and his organization pull off the extraordinary feat of getting this provision into law? How does it work for taxpayers? How was it been implemented by the government? And most importantly, is it producing the kind of inner-city and impoverished area development promised by its backers?
Our tour guide this morning into the world of opportunity zones from inner-city Baltimore to the opportunity zone that includes the Mandalay Bay hotel on the Las Vegas strip is David Wessel. His new book Only the Rich Can Play is a sweeping and often funny look at the opportunity zone landscape.
