A bipartisan group of congressmen recently introduced a new bill intended to reinvigorate America’s poorest communities. The Investing in Opportunity Act (IOA) will allow investors to temporarily delay paying capital-gains taxes on their investments if they choose to reinvest the money into “opportunity zones” or distressed communities across the country.
The legislation was cosponsored in the Senate by Republican Tim Scott of South Carolina and Democrat Cory Booker of New Jersey, and in the House by Pat Tiberi (R-Ohio) and Ron Kind (D-Wisc.). These congressmen report that their bill has garnered bipartisan support in both chambers, and they believe that its provisions will allow for tremendous economic growth in some of the country’s most underserved communities.
The bill’s primary function is to target private-sector investors and give them a tax incentive to roll their assets into areas that most need money, which, according to Scott, has proven more successful than government-run anti-poverty programs.
“It’s designed so that private-sector folks can do what they do naturally in a way that helps the poor,” Scott said during a media roundtable just before the bill was introduced in both chambers.
Scott tells National Review that the very nature of government programs often makes it difficult to measure their success, and there’s little incentive for politicians or bureaucrats to follow up on their progress. “With this program, it’s very easy for investors to measure their success, and they will want to monitor it because it’s their own money going into these communities,” he says.
This bill is part of a larger effort that Scott calls his “Opportunity Agenda,” a blueprint by which he hopes to eliminate the barriers to success faced by many disadvantaged and low-income Americans in South Carolina. But his efforts aren’t limited to his state; last fall he announced a partnership called the Senate Opportunity Coalition — profiled in National Review Online in October — with a handful of GOP senators who hope to address poverty in their own states with local, conservative solutions.
Tiberi noted during the roundtable that the Appalachia region, rural Ohio, and the urban corridors outside of his state’s bigger cities all suffer from a similar lack of opportunity and resulting poverty. This fact is essential to understanding the Opportunity Agenda and its attending bills such as the IOA.
Poverty isn’t limited to declining metropolitan areas or inner cities where children can’t access adequate education, and food and housing are highly insecure. Every region poses unique obstacles to individual success, and Americans often end up in crippling poverty despite the millions of dollars in government money poured into their states.
These leaders and others like them hope to eliminate those obstacles one step at a time by stripping back government control and permitting communities to flourish on their own. Scott gave the example of Spartanburg in his own state, which formed a public-private partnership to develop an innovative new neighborhood, eliminating the food deserts that had long plagued the area.
“But it also kept existing communities intact so that it’s not large-scale gentrification. People stay where they’re from and where they like to live and have always lived,” he added.
When he introduced his Opportunity Agenda on the Senate floor, Scott promised that his work would target the underlying causes of systemic poverty in the U.S. “We will turn neglected neighborhoods, ravaged by poverty, into centers of excellence,” he said. “These people are not asking for a handout. They’re asking for a hand up.”
This newest bill is the most recent proof that Scott intends to keep his word, and to do so with the help of those on both sides of the aisle.