Anyone who doubts the conservative commitment to fighting poverty should read the essay published Friday at RealClearPolicy by Ben Carson, secretary of Housing and Urban Development. It assesses the new “opportunity zones” enacted as part of the Republican-passed 2017 tax reform, designed to “incentiviz[e] long-term investments in low-income neighborhoods.”
Opportunity zones are the latest iteration of policies, then called “enterprise zones,” long championed by former President Ronald Reagan and especially by conservative former U.S. Rep. and HUD Secretary Jack Kemp. Earlier versions of the idea were tried at both state and federal levels, to not-fully-conclusive but somewhat helpful effect, but they were hampered by then-President Bill Clinton’s overly bureaucratized, overly regulated approach.
The basic concept of the new opportunity zones is simple: In areas that meet neutral criteria for being “economically distressed,” investors can qualify for capital gains tax breaks, some of them immediate and others more long-term. In all, the program “aims to stimulate the investment of the estimated $6.1 trillion of unrealized private gains held by US households.”
Without going into detail, suffice it to say that these new opportunity zones applied lessons learned from the earlier mixed-bag results of enterprise zones. Introduced as stand-alone legislation by Tim Scott, R-S.C.; and Cory Booker, D-N.J.; these zones included in the 2017 Tax Cuts and Jobs Act suffer from almost no bureaucratic restrictions, and they are better designed for lasting benefits than the Clinton-approved versions of the 1990s.
In Carson’s essay, the good doctor may be slightly jumping the gun to claim that the opportunity zones are an unqualified success already. But he does make a good case that early returns indicate serious progress. For example, “data from Zillow shows the negative growth rate of property sales prices in selected vulnerable communities, prior to the Trump tax cuts, flipped to a positive growth rate of 20 percent following Opportunity Zones designation.”
Yet as Carson highlighted, this is not a front-loaded program.
“Only investors who commit capital for five, seven, and ten years,” he explained, “receive the tax law’s formidable financial benefits. That means new growth becomes consistent growth, and new jobs become steady jobs.”
In the vernacular, this is “good stuff.” It shows that conservatives can marinate great ideas for combating poverty, and that when liberals such as Booker (or, decades ago, earlier New Jersey Sen. Bill Bradley) are willing to join forces, good things can happen.
Opportunity, enterprise, and empowerment are favorite themes among the strain of conservatism that runs from Reagan through Kemp and Paul Ryan to Tim Scott. They are themes, though, that should know no ideological boundaries. Here’s hoping policymakers keep finding ways to make them reality.
