For Richer or Poorer: Incentivizing Meaningful Investments in Qualified Opportunity Zones
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.
Monica L. Keo, For Richer or Poorer: Incentivizing Meaningful Investments in Qualified Opportunity Zones, 44 SEATTLE U. L. REV. 1227 (2021).
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