Bipartisan, Bicameral Legislators Offer Innovative Plan to Kickstart Revitalization of Economically Distressed Communities Across the Country
Washington, D.C. – Today, the Economic Innovation Group (EIG) welcomed the introduction of the Investing in Opportunity Act, a place-based solution to America’s growing economic opportunity gap, one of the most pressing economic issues of our time. Introduced by Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Representatives Pat Tiberi (R-OH) and Ron Kind (D-WI), the legislation facilitates a national network of geographically targeted funds and new incentives for investments in economically distressed communities.
The Investing in Opportunity Act will provide a mechanism for the revitalization of distressed communities through targeted investment by:
- Concentrating capital by establishing “Opportunity Zones” — geographically targeted communities in each state in need of revitalization, which will be designated by governors
- Removing the barrier to investment through a temporary capital gains deferral to encourage investors to roll over the proceeds from the sale of an appreciated asset into new investments in these communities
- Encouraging investors to pool resources and risk through newly-created “Opportunity Funds”
- Providing incentive for investors to make long-term commitments to these communities
The Economic Innovation Group (EIG) recently released the 2016 Distressed Communities Index (DCI), which shows that nearly seven years since the onset of the Great Recession, economic gains have not been as evenly shared as in previous recoveries. In all, more than 50 million Americans live in economically distressed communities that could benefit from place-based solutions like the Investing in Opportunity Act.
EIG issued the following statements in support of the legislation:
“The Economic Innovation Group was founded to develop and champion policy solutions to connect communities with the capital they desperately need,” said EIG Founder and Chairman Sean Parker. “The Investing in Opportunity Act provides a vital new pathway for investors and entrepreneurs to kickstart economic growth in distressed areas across America. This bipartisan effort is a model for how policymakers can tackle tough issues in an innovative way.”
“Many Americans would welcome the chance to support economic revitalization in underserved communities, but simply don’t know how to help,” said Dr. Kevin A. Hassett, State Farm James Q. Wilson Chair in American Politics and Culture and Director of Economic Policy Studies, American Enterprise Institute. “The ‘Opportunity Fund’ concept is a simple but powerful antidote to this problem. We need innovative ideas like this to fuel growth and expand opportunity for the millions of Americans living in economically distressed communities.”
“Even as our economy grows and the job market tightens, too many people are left behind in communities that offer little opportunity,” said Dr. Jared Bernstein, Senior Fellow, Center for Budget and Policy Priorities. “One idea is to help families leave those areas, but the ‘Opportunity Fund’ concept recognizes that can’t be the only solution. By helping to steer capital to places with deep investment deficits, these funds can create new opportunities in places that have long been disconnected from the broader economy.”
About the Economic Innovation Group (EIG)
The Economic Innovation Group (EIG) is an ideas laboratory and advocacy organization whose mission is to advance solutions that empower entrepreneurs and investors to forge a more dynamic American economy. Headquartered in Washington, D.C. and led by an experienced, bipartisan team, EIG convenes leading experts from the public and private sectors, develops original policy research, and works to advance creative legislative proposals that will bring new jobs, investment, and economic growth to communities across the nation. For more information, visit eig.org.