The U.S. Senate has proposed a bill to help natural disaster areas by easing any potential tax burdens in the recovery process, designating these areas as Opportunity Zones. The OZ incentive program encourages, through favorable tax treatment, investors to roll over capital gains into funds that will be invested in distressed communities.
However, the OZ program — established as part of the Tax Cuts and Jobs Act of 2017 to spur economic development in low-income neighborhoods — does not contain the necessary community guardrails to protect existing residents, and adding natural disaster areas as OZs will further the problems inherent in the program. As climate change only expands the size and scope of these natural disasters, we must be especially careful in how we address the aftermath of these extreme events.
The above excerpt was originally published in Morning Consult.
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