A federal tax break intended to draw investment to lower-income areas has become one more way for the rich to avoid paying taxes.
Of all the ways President Trump’s 2017 tax cut has enriched the wealthy at the expense of the public interest, perhaps the most outrageous is the black comedy of “opportunity zones.”
The law lets the wealthy avoid capital gains taxation by investing in projects or companies in designated geographical areas. The stated purpose is to drive big money into investment deserts — areas where wealthy investors might otherwise hesitate to tread. In reality, the tax break is being used to juice the profit margins on projects like a proposed luxury condominium development at a “superyacht marina” in ritzy West Palm Beach, Fla.
According to ProPublica, then-Gov. Rick Scott of Florida agreed to create the opportunity zone after lobbying by the owner of the marina, Wayne Huizenga Jr., the son of the billionaire founder of Waste Management and AutoNation. The Huizenga family gives generously to Republican candidates, including Mr. Scott, and Mr. Huizenga wrote a letter to Mr. Scott requesting the inclusion of the marina. Mr. Scott obliged — while deciding not to honor the request of the city government to designate nearby, less affluent areas of the same city.
The report adds to a rapidly mounting pile of evidence that the design of the opportunity zone program is allowing a massive waste of public resources for the benefit of a wealthy few.
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