The Trump administration finished regulations this week that will make it easier for wealthy Americans to invest in and benefit from opportunity zones, a tax incentive created in 2017 that was intended to funnel investment into low-income communities, the New York Times reported. Treasury Department officials and proponents of the zones said the regulations would push more funds into designated areas by giving investors more clarity and flexibility on how to deploy their money. “It’s a prerequisite for a functioning market to have regulatory certainty,” said John Lettieri, president and chief executive of the Economic Innovation Group, a Washington think tank that created the concept of an opportunity zone and helped get it into law. “It’s hard to overstate how much of an impediment a lack of regulatory clarity has been, for opportunity zones to work as Congress intended.” Opportunity zones convey tax advantages to investors who take the proceeds of a capital gain, like the sale of a stock or a business, and invest them through a fund into a qualifying project in a designated zone. They were a largely overlooked provision of President Trump’s tax law when Congress was debating it in 2017, but in the two years since the law's signing, the zones have stirred interest from investors on Wall Street, along with philanthropists and city leaders looking to revitalize distressed areas. Critics said that Treasury’s regulations did not address a fundamental flaw with the zones, which lack legal guidelines to ensure the investments actually benefit low-income areas and residents. Senator Ron Wyden (D-Oregon), who has introduced legislation that would force investors in the zones to disclose more information about their spending and its effects, said that “at every step, the Treasury Department has made it easier for wealthy investors to reap a taxpayer windfall” from the zones.
