Liberal congresswomen Alexandria Ocasio-Cortez and Rashida Tlaib filed an amendment to a House spending package on Wednesday that would defund the “opportunity zone” program created by President Trump’s 2017 tax law.
The amendment, if made into law, would prohibit the Internal Revenue Service from using any funds in a large House spending bill, which is currently under consideration, to administer or enforce the opportunity zone program, a tax break created by the 2017 tax bill meant to revitalize poor communities through private investments.
The tax incentive was created to benefit poor neighborhoods. Democrats opposed the measure and have drawn attention to reports that very wealthy people, such as financier Michael Milken, have taken advantage of opportunity zone designations. ProPublica reported last November that a “superyacht marina” qualified as an opportunity zone. Because there is no requirement to provide an overarching view of how the zones are working, the prevalence of such examples is unknown.
Ocasio-Cortez of New York and Tlaib of Michigan make up half of the liberal contingent of four Democratic women in Congress who call themselves “the Squad.” With the support of other liberal lawmakers and groups, Tlaib tried to repeal the opportunity zones program in 2019 but did not succeed.
The opportunity zones were included in the 2017 tax law by Sen. Tim Scott, a South Carolina Republican who was born into poverty in North Charleston. The program was based on a bill he originally co-sponsored in 2017 with several Democrats, including Sen. Cory Booker, a Democrat of New Jersey, and had support from House lawmakers from both parties.
It is not clear whether the Democrats who supported the opportunity zones in 2017 will now support Ocasio-Cortez’s amendment to defund it.
Trump claimed success for the program during his State of the Union address earlier this year.
“Wealthy people and companies are pouring money into poor neighborhoods or areas that haven’t seen investment in many decades,” Trump said in February.
The opportunity zones provide preferential tax treatment for investments in economically distressed communities. Since their inception, reports have surfaced that they are being designated in wealthier areas of the country and that they do not work as intended. The zones are expected to reduce federal revenues by $1.6 billion over a 10-year period, according to the Joint Committee on Taxation, Congress’s official scorekeeper.
Scott said last year that his original legislation included significant reporting requirements on the outcomes of the opportunity zones initiative, and although these were stripped out of the bill due to Senate rules, he is working to have them reinstated.
