Bipartisan legislation would put private investment to work revitalizing distressed communities throughout America
Washington, D.C. – Today, the Economic Innovation Group (EIG) lead a diverse group of stakeholders who applauded the reintroduction of the Investing in Opportunity Act (IIOA), bipartisan legislation that will incentivize the private sector to make long-term investments to revitalize distressed communities. Senators Tim Scott (R-SC) and Cory Booker (D-NJ) and Representatives Pat Tiberi (R-OH) and Ron Kind (D-WI) sponsored the bill to create jobs and restore economic opportunity to the places that need it most.
The Investing in Opportunity Act facilitates private investment in the following ways:
Removes barriers to investment through a temporary capital gains deferral in exchange for reinvesting them in distressed communities
Provides a new way for investors across the nation to pool resources through newly-created “Opportunity Funds,” established specifically for making investments in distressed communities
Concentrates capital by establishing “Opportunity Zones,” geographically targeted low-income areas that will be designated by governors
Encourages investors to make long-term commitments to these communities by tying incentives to longevity
Since first being introduced last year, the Investing in Opportunity Act has garnered the support of a wide and diverse array of policymakers from across the country, as well as dozens of leading organizations, investors, policy experts, and other stakeholders.
“It has never been more clear that America’s challenges require the collaboration of Democrats and Republicans and the public and private sectors alike,” said Sean Parker, president of the Parker Foundation and chairman of the Economic Innovation Group. “I commend the bipartisan coalition behind the Investing in Opportunity Act for their work to bridge the growing economic divide in our country. This bill is a public policy innovation that will put billions of dollars in new capital to work revitalizing underserved communities the best way we know how – by ensuring they have access to the resources to create the next generation of American enterprise.”
“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 the director of economic policy studies at the 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.”
“The Investing in Opportunity Act will steer capital to places with deep investment deficits, helping to create new opportunities in places that have long been disconnected from the broader economy,” said Jared Bernstein, senior fellow at the Center for Budget and Policy Priorities.
EIG’s recently released study, “Dynamism in Retreat: Consequences for Regions, Markets, and Workers,” explores how a collapse in new business formation, lower labor mobility rates, and increased industry concentration have contributed to economic stagnation in communities across the country. Since 2010, five metro areas alone produced the same net increase in businesses as the rest of the country combined, as most metro and rural areas are now seeing more businesses close than open. New policy solutions, like IIOA, are required to address increasing geographic inequality.
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.