A bipartisan group of lawmakers is hoping its anti-poverty legislation will become law this year as part of a broader push for a tax overhaul.
“We are teed up for success in this Congress,” Sen. Tim Scott said. “The realistic opportunity for tax reform was not last Congress. It’s this Congress.”
The South Carolina Republican teamed up with Democratic Sen. Cory Booker of New Jersey, Democratic Rep. Ron Kind of Wisconsin, and Republican Rep. Pat Tiberi of Ohio to reintroduce the “Investing in Opportunity Act” on Thursday. The bill is aimed at spurring private-sector investment in struggling communities.
Kind pointed out that the measure would combat two challenges: poverty and gaps in economic recovery throughout the country.
The legislation would allow investors to defer paying capital gains taxes if they reinvest in “opportunity funds” that would be targeted at “opportunity zones,” or a low-income communities designated by state governments.
“There’s really no direct federal involvement other than we defer capital gains,” Tiberi, a member of the House Ways and Means Committee, told a small group of reporters gathered in Scott’s office Thursday. “There is a cost because of the deferral of capital gains, but ultimately, those will be paid.”
The fact that the bill allows state governments to direct the funds and does not involve additional federal funds being sent to these communities should make it attractive to lawmakers on both sides of the aisle, the bill’s proponents said.
And, Scott pointed out, it could also receive backing from the Trump administration, which has emphasized helping Americans who have not reaped the benefits of an economic recovery.
Scott said he has discussed the legislation with Vice President Mike Pence, Treasury nominee Steve Mnuchin, Housing and Urban Development nominee Ben Carson, economic adviser Gary Cohn, and White House staffers. Scott said they have all been intrigued by the proposal.
Scott, Tiberi and Kind have also all had conversations about the measure with House Speaker Paul D. Ryan, who has made combating poverty one of his top priorities.
When the group introduced the bill in the last Congress, Scott said they realized it was not likely to become law. But since the bill deals in taxes, the group sees a new push for a tax overhaul as a potential vehicle for their legislation.
GOP leaders have said they intend to use a procedural gambit known as budget reconciliation to advance a tax overhaul later this year. Under the procedure, the legislation would circumvent the typical 60-vote threshold required in the Senate to end debate on legislation.
In the meantime, the lawmakers said they would keep selling their colleagues on their proposal. Scott said he and Booker were working the Senate floor Wednesday night, and picked up two new co-sponsors, and potentially a third. Scott wants to ensure balance, so he said he would work to add one Democrat and one GOP lawmaker to the bill at a time.
Scott, Kind and Tiberi said their legislation would affect 50 million Americans who live in “distressed communities,” which are defined by indicators such as education levels, unemployment, poverty rate, median income ratio and housing vacancies.
The lawmakers said encouraging private-sector investment in those communities could have a multiplying effect. The addition of a new grocery store, Tiberi explained, would create more jobs and attract more people to the neighborhood.
Scott drew on his own experience, growing up in poverty, and said revitalizing the communities on the ground would be key.
“Something like the Investing in Opportunity Act really does provide a bridge to a better future,” he said. “And the good news is you don’t have to leave your community to find that bridge. You can actually experience a renewal in your community”