The federal government’s most powerful economic weapon is the tax code, and its most pressing problem is the ailing American Dream. Enter “opportunity zones,” economically distressed communities where new investments can receive preferential tax treatment. The incentives were quietly inserted into last year’s tax-reform bill. Treasury Secretary Steven Mnuchin recently predicted they could prompt $100 billion in private investment to low-income communities.
Treasury released its first round of opportunity-zone regulations on Friday. Tapping $6.1 trillion in potential capital gains, according to the Economic Innovation Group, opportunity zones could reshape capital markets and reinvigorate dozens of major American cities. Tax benefits for patient capital infusions will encourage U.S. taxpayers to capitalize real-estate projects, infrastructure and businesses in America’s heartland. This includes the offer of tax-free profits for investments held at least a decade.
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