The Opportunity Zone Tax Scam Is Under the Microscope
Growing scrutiny for a broken program.
The “Opportunity Zone” program, created by the 2017 Tax Cuts and Jobs Act, is supposed to bring new investments into low-income neighborhoods, helping juice economic development in places that don’t generally attract investor dollars.
As I’ve noted here and elsewhere, though, the whole thing is a scam: It’ll wind up doling out tax breaks to rich dudes and gentrifiers for stuff they were going to do anyway, while not helping the people at whom it’s ostensibly aimed.
The program is so lacking in basic reporting requirements and transparency that a lot of chicanery could occur without officials even knowing about it. Oh, and hey, the Treasury Department may have intervened to give Opportunity Zone benefits to the Treasury Secretary’s buddy.
All in all, not great.
The good news, though, is more folks are realizing the extent to which the program is a budding disaster.
For instance, four Democrats, including New Jersey Sen. Cory Booker, one of the people who created Opportunity Zones in the first place, have called for a Government Accountability Office investigation into the program. Vermont Sen. Bernie Sanders has said that, if he wins the 2020 presidential election, he’ll toss Opportunity Zones by the wayside. The news that Treasury Secretary Mnuchin may be directing benefits to friends prompted a letter from congressional Democrats to the Treasury Inspector General.
The New York Times has a good wrap up of other criticisms of the program, which I won’t repeat all over again here.
My favorite move, though, is Oregon Sen. Ron Wyden’s new bill, the “Opportunity Zone Reporting and Reform Act.” Among other measures, Wyden’s bill would make it so sports stadiums are ineligible for Opportunity Zone benefits.
As I first reported here at Boondoggle, there are at least 52 pro sports stadiums in Opportunity Zones, which means owners of those teams could claim benefits for either future stadium improvements or development on land around stadiums that they bought up — all of which is already in their interest, Opportunity Zone or not.
None of this, of course, means that Opportunity Zones are disappearing or are any less of a mess today than they were yesterday. But if the first step in fixing a problem is admitting there is one, then this is all encouraging news.
Thanks for reading this edition of Boondoggle. If you don’t subscribe already, just click the green button below. If you liked this post, take a moment and click the little heart under the headline. It helps.
If you do subscribe, please send this around to friends, family, neighbors, or whoever you think might like it, and tell them to sign up too.
Finally, if you’d like to pick up a copy of my book, The Billionaire Boondoggle, go here. Thanks again!