I really think the opportunity zones were created for precisely the purposes described in the article. We’ve made a strategic decision to forego taxes in certain areas in order to incentivize investment in poor (traditionally minority) areas. The rules were created specifically so that people would use them.
It would rise to the level of cheating if you abuse the rules. Investing in an opportunity zone, starting a business there, improving property, employing people, re-investing there. These are all the intended effects of opportunity zones.
It seems like an awesome loophole, but it’s not. The hole was put there deliberately. It’s meant to be used.
If you’re curious, take a tour of your nearest opportunity zone. Imagine starting a business there. Imagine your employees shopping at the bodega on the corner, grabbing lunch on the street, using the run-down auto repair shop because it’s convenient. If you’re willing to locate your business in an area we’ve decided we want revitalized you can realize tax benefits. But there’s some risk, so do it with open eyes.
Depends on the spirit of the reduction and income levels. A Roth IRA was designed specifically for wage earners to have a tax-friendly investment vehicle to save for retirement. This benefits them and society. I don’t think you can say the same thing about the OP here.
The 401k was a literal tax loophole - it was never intended to be a tax-deferred retirement vehicle. Some accountant just noticed it in the tax code and figured that most Americans could actually take advantage of it.
Intent matters. Opportunity Zones are set up to incentivize actual businesses providing services to the local community, not to serve as vehicles for far-away rich arseholes to cheat money out of the taxman.
But if the rules don't enforce that, and allow far-away rich arseholes to use these zones to cheat money out of the taxman, then that's sloppy legislating. The loopholes need to be closed. Relying on the goodwill of people whose primary unifying characteristic is the hoarding of extreme amounts of money is a bad idea.
I agree that it’s sloppy legislation and to that end the group to blame is the government (and ultimately the people).
But I disagree that if the rules don’t get enforced that it’s seemingly “ok” for people to exploit it. They should have common decency and ethical guidelines here. Probably why I’m not one of them.
I didn't say it was ok to exploit it. I say it's unavoidable that people will exploit it.
I do wish we could run society purely on goodwill and people's intrinsic morality, but we've got a society that pushes people to crave more and more wealth, and those two don't go together.
The fact is that wealth and power protect themselves and always have.
While crafting a fair society we must recognize this and deliberately skew the rules to favor those without wealth and power. In the US we mean we’ll but have utterly failed to do so. Our legal system is a prime example. The fact that we more often tax minimum wage workers than billionaires is another.
Our society is shamefully unfair. But I actually think opportunity zones are a step in the right direction.
I apologize. The reading I had was you were kind of nonchalant about it in an almost accepting way. Though, I'd say there are many who would say it's ok "because you can", and I think they're irresponsible and disrespectful of themselves and their fellow humans.
I certainly don't think 'legal' necessarily implies 'moral'. Sometimes they're the exact opposite. There are also things that aren't legislated that should still guide us.
For example, it's not illegal to be an asshole to someone. But that doesn't make it okay either. It's not something that's ever going to be legislated, and I don't think it should be. Tax rules, on the other hand, should be legislated, because the same people will always take advantage of them if they can. I don't see purely voluntary tax as working (though a certain type of libertarian loves to suggest exactly that).
The problem is a fundamental disadvantage in available manpower. Billionaires employ literal armies worth of extremely well paid lawyers, accountants and other professionals continuously working on finding and exploiting loopholes involving multiple jurisdictions, whereas most of the public services sector is barely keeping up. (Yes I'm aware that especially at the federal scale, the ultra rich sometimes outright buy special tax breaks, but that's not the case we're talking about)
The solution would be to allow punishing breaking the intent of a law, but given how politicized even the justice system is these days, I'm not so sure if that's a good idea either.
If you could specify the intent in a way that could be adjudicated, why couldn’t you just write the law better in a different dimension? “This applies only up to $X M/yr” or whatever.
Having someone later come along and try to devine what the “true intent” was and levy punishments for behavior clearly allowed by the law but against an imputed intent sounds worse for society based on laws than the avoidance of some taxes via a poorly written law.
But the rules require that work be done in the area, that property be improved, that gains be reinvested in the area. Rich arseholes who never set foot in the area can still pour buckets of cash into areas WE DECIDED need it most.
