The Winston-Salem Journal reports that a component of the recently passed federal tax cut plan would allow states to carve out low-income areas for special treatment.
Low-income census tracts are areas where the poverty rate is 20 percent or greater, and/or family income is less than 80 percent of the area’s median income.
Those zones are eligible to offer tax incentives for qualified investors “to reinvest unrealized capital gains.”
States are authorized to designate up to 25 percent of their total low-income census tracts as qualified opportunity zones.
The N.C. Commerce Department said the state has just more than 1,000 low-income census tracts that could qualify. The department can designate up to 251 census tracts as opportunity zones.
Not so fast, says our Mitch Kokai.
“The devil lies in the details of this proposal.
“We should be cautious of any government program that allows bureaucrats to choose particular beneficiaries of tax breaks,” Kokai said. “It’s the same argument to be made against targeted tax incentives North Carolina and its local governments offer to favored companies and industries.”
Mitch helps us understand the issue of corporate tax giveaways in this piece — including what IS a giveaway and what ISN’T. Hint: tax cuts are not giveaways.
