A Reminder About Opportunity Zones: Bad Policy Flacked Locally

Those following what passes for economic policy in Whitewater know that this website has been rightly critical of the economic opportunity zones that were part of Trump’s tax bill. See About that Trump Tax Bill, More About that Trump Tax Bill, and The Trump Tax Bill: That’s Not Reform.

Jenny Schuetz, commenting on part of Trump’s 2020 State of the Union address, observes that Opportunity Zones aren’t as great as they sound:

President Trump took a victory lap on Opportunity Zones, claiming that money is “pouring into poor neighborhoods” due to tax changes in the 2017 Tax Cuts and Jobs Act. Evidence doesn’t back this up, though. Many neighborhoods designated as OZs were already experiencing socioeconomic growth before the program began. And critics have pointed out the program designis prone to cronyism and abuse—not a recipe for helping poor neighborhoods.

Whitewater’s Community Development Authority was much in favor of these zones, however, in a press release from 2018:

“We’re very excited at the quick approval of our two EOZ nominees given by US Treasury Secretary Robert Mnuchin,” said Dave Carlson, Executive Director of the Whitewater Community Development Authority (CDA). Governor Walker had included Whitewater’s two nominees as a part of a broad list of 118 sites statewide which were forwarded to Secretary Mnuchin in late March.

“This has the potential to spark some much needed growth in our community,” said Larry Kachel, Chair of the Whitewater CDA. “The EOZ program will allow certain investment gains to be redirected, with significant tax savings, into economic opportunity funds which will make investments in communities like Whitewater.” Investors will be able to earn permanent tax savings on the original capital gain based on how long they keep it invested in the economic opportunity fund.

This was bad policy in 2018, and remains bad policy now that Trump’s proposing more of it.

(The CDA press release seems to have disappeared from the City of Whitewater’s website, but I have a retrieved a copy from a private online archive, and embedded it below. I’ll not say that the absence of the release from the municipal website is an intentional act, but it is a convenient development for those who’d like to conceal their wrongheaded support of this part of Trump’s tax bill.)

Still, then-CDA chairman, Larry Kachel, who touted this part of the bill, also showcased the Foxconn project at a meeting of his business special interest group, the ‘Greater Whitewater Committee.’ If you thought Foxconn would be a good idea, then you need to re-think your definition of a good idea…

In any event, the name doesn’t match the local organization – no special interest ever made a community greater by flacking trickle-down economics or multi-billion-dollar corporate welfare deals.

Original release below —

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