The 2024 presidential debate between Donald Trump and Joe Biden has stirred significant discussions about their political stances and crucial economic initiatives that could shape the future. One such initiative that gained remarkable attention during the debate is the Opportunity Zones program.
A Shout-Out to Opportunity Zones
During the debate, former President Donald Trump praised Sen. Tim Scott (R-S.C.), creating speculation that Scott could be a potential running mate. Trump’s reference to Scott’s economic initiative, Opportunity Zones, as “one of the most successful economic developments ever in the country” highlights the program’s significance. Trump stated, “Tim Scott, who’s incredible. He did a great job. A great senator from South Carolina. He came to me with the idea. It was a great idea. It’s one of the most successful development acts ever in the country, Opportunity Zones.”
The Impact of Opportunity Zones
Introduced by Scott through the 2017 Tax Cuts and Jobs Act, Opportunity Zones aims to spur economic growth by offering tax benefits to businesses that invest in rural and low-income communities. Trump worked closely with Scott on this legislation during his tenure in the White House. Scott emphasizes, “Opportunity Zones put the decision-making in the hands of state and local leaders who know their communities best. This incentive aims to lift entire communities out of poverty.”
How Opportunity Zones Work
Opportunity Zones are designated areas that offer tax incentives to investors to spur economic development. These zones allow investors to defer capital gains taxes by reinvesting in qualified Opportunity Funds. The longer the investment is held, the greater the tax benefits, including potential elimination of gains on new investments.
What This Means for Investors
The spotlight on Opportunity Zones in the presidential debate is excellent news for investors. Here are a few key insights:
• Tax Benefits: Investors can defer capital gains taxes by reinvesting in Opportunity Zones. This can lead to substantial tax savings and increased returns on investment
• Community Impact: By investing in low-income and rural communities, investors gain financial benefits and contribute to significant social and economic improvements
• Long-Term Growth: The continued political support for Opportunity Zones suggests a stable and favorable environment for long-term investments
A Brief History of Opportunity Zones
Understanding the history of Opportunity Zones provides essential context for program participants. Conceptualized by the Economic Innovation Group (EIG) in a 2015 white paper titled “Unlocking Private Capital to Facilitate Economic Growth in Distressed Areas,” Opportunity Zones emerged as a solution to stimulate economic development in underserved communities.
The white paper, which represented bipartisan collaboration, was co-authored by Jared Bernstein and Kevin Hassett. Bernstein, a Democrat, served as an economic adviser to then-Vice President Joe Biden and later as chair of President Biden’s Council of Economic Advisers. Hasset, a Republican, became a senior economic adviser to President Donald Trump.
Policymakers observed that wealthy communities recovered quickly following the Great Recession of 2007-09, while low-income communities lagged behind, exacerbating wealth and income inequality. By any measure, wealth and income inequality in the U.S. are near their highest levels since World War II.
To address these societal concerns, policymakers sought to incentivize wealthy individuals to invest in low-income areas, stimulating local economies at scale. The solution was Opportunity Zones, a bipartisan, place-based policy initiative encouraging investors to redeploy gains from successful investments into new, long-term investments in struggling communities.
Opportunity Zone legislation, championed by Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Representatives Pat Tiberi (R-OH) and Ron Kind (D-WI), was introduced in 2016 and reintroduced in 2017 as the Investing in Opportunity Act. Most provisions were enacted as part of the 2017 Tax Cuts & Jobs Act, signed into law by President Donald Trump on December 22, 2017.
Bipartisan Support
The bipartisan support for Opportunity Zones underscores their importance in the current economic landscape. While Trump and Scott championed the initiative, it is essential to recognize its potential benefits across political lines. For investors, the renewed focus on Opportunity Zones during the debate signals a robust future for this economic development tool.
Why Now Is the Perfect Time to Start Your Opportunity Zone Journey
With the 2024 presidential debate bringing Opportunity Zones back into the limelight, now is the perfect time to begin your Opportunity Zone journey. By investing in Opportunity Zones, you benefit financially and play a crucial role in revitalizing communities across the country.
• Favorable Legislation: The current political climate supports Opportunity Zones, with both parties recognizing their value. This ensures a stable and encouraging environment for investors
• Economic Recovery: Post-pandemic recovery efforts focus on revitalizing underserved communities, making Opportunity Zones a crucial part of national economic strategies
• Rising Property Values: Early investments in Opportunity Zones can capitalize on the expected rise in property values as these areas develop and attract more businesses
• Social Impact: Investing now allows you to be part of a transformative movement that addresses wealth and income inequality, creating lasting positive impacts on communities
• Tax Advantages: The tax benefits are most substantial the earlier you invest, allowing for more significant deferral and potentially eliminating capital gains taxes
Stay in the Loop with OZPros and Get Started on Your OZ Journey
The 2024 presidential debate has reignited interest in Opportunity Zones, and there’s no better time to get involved. OZPros, the leading opportunity zone advisory firm, is here to help you navigate this exciting journey. Stay updated on the latest developments and insights by following OZPros on social media (YouTube, LinkedIn, Facebook, Instagram) and subscribing to our newsletter.
Get Started with Our Quick and Free OZ Assessment Tool
You don’t need a capital gain to start your Opportunity Zone journey. In fact, you can begin without spending a single penny. Our one-of-a-kind OZ Assessment tool acts as a consultant, OZ expert, and guide all rolled into one. And the best part? It’s completely free.
Why Take the OZ Assessment?
• Clear Path to Success: Our OZ Assessment removes the guesswork from your Opportunity Zone journey. It provides a roadmap for your next steps, whether you are brand new to OZs or a fellow OZPros
• Personalized Recommendations: This assessment will analyze your specific investment goals, OZ readiness, and capital gain details to provide tailored recommendations for your next steps within the Opportunity Zone program
• Actionable Strategies: After you take this quick OZ Assessment, you’ll get actionable strategies and insights we’ve uncovered from the 3,000+ Strategy Calls we’ve conducted for our clients who have succeeded in your shoes
Take advantage of this opportunity to unlock the full potential of the Opportunity Zone program, and let us guide you toward the feel-good tax savings summit.
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