Monica L. Keo


The wealth disparity in the United States is nothing new. Many have proposed wealth taxes and higher tax rates for large corporations to address income inequality; however, these proposals have been criticized as tax programs that are difficult to administer. Congress passed the Tax Cut and Jobs Act (TCJA) in 2017 and created a new investment vehicle known as the Qualified Opportunity Zone (QOZ). The QOZ program incentivizes private investors to invest their capital gains in exchange for a reduction in capital gains tax. The underlying idea of the QOZ program is to utilize a new tool designed to spur economic development and job creation in economically depressed areas. However, there appears to be a disproportionate number of investments in non-low-income QOZs than low-income QOZs, which is not in line with Congress’s intent for this program. Part I of this Comment will provide a background on QOZs; it will investigate choosing QOZs as an investment vehicle and compare the QOZ program to another preferred method of deferring capital gains. Part II will examine a disparity between the purpose of the QOZ program and the current effect on investments, as well as uncover how this disparity has occurred. Part III will provide a solution to resolve the disparity through statutory amendments.