Page 8 - The GSE Report March-April 2018

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House Financial Services Committee Chairman Jeb Hensarling (R-TX) said he is open to advancing the Senate-approved bill that roll back some Dodd Frank provisions, as long as there are “other pathways” to advancing a separate series of House-favored bills, containing provisions that are not in the Senate bill.
“I’m not naive about these matters,” said Hensarling during a speech at the U.S. Chamber of Commerce. “I know that ultimately the fate of these House bills rest with approximately eight self- styled moderate Senate Democrats. ...I’d be happy to attend multiple signing ceremonies in the White House. The more pens the merrier.” (Wall Street Journal, Andrew Ackerman, 03/14/18; Wall Street Journal, Andrew Ackerman, 03/26/18)
Jack Kemp’s legacy: Qualified Opportunity Zones
A little-noticed section of the $1.5 trillion tax reform bill, the Tax Cuts and Jobs Act, enacted last year might turn out to be the provision that has the most impact on revitalizing communities where economic recovery has yet to arrive. The law created “Qualified Opportunity Zones (QOZ),” which will use tax incentives to draw long-term investment to parts of American that continue to struggle with high poverty and sluggish job and business economic growth. If the zones succeed, they could help revitalize neighborhoods and towns that are starved for investment.”
There are two parts to the QOZ program. First, state and territorial governors (and the mayor of D.C.) were asked by Treasury to designate up to a quarter of their states’ 41,000 low-income, high poverty census tracts as Opportunity Zones. Their applications designating their chosen zones were due on March 21, 2018. Treasury is now processing the applications they received. On April 9, 2018, Treasury announced the approval of the first set of zones for 18 states’ and possessions’ applicants. Treasury will announce more QOZ designations as the agency completes its review of the applications.
AEI’s John Baily wrote:
The second part of the program is the creation of Opportunity Funds, a new class of investment vehicles that gives investors the chance to reduce their capital gains tax when they invest in projects located in these areas. The tax incentive increases the longer the investment is kept in the community. If the investment is held for more than ten years, the investor will pay no additional capital gains on investment made through the fund.
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