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Only the Rich Can Play
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Only the Rich Can Play

How Washington Works in the New Gilded Age

David Wessel
Public Affairs, 2021
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Editorial Rating

8

Qualities

  • Analytical
  • Well Structured
  • Engaging

Recommendation

Pulitzer Prize–winning economics journalist David Wessel brings decades of experience as a Washington reporter to bear on this absorbing account of policy and profit-making in America. Opportunity Zones began as an idealistic effort to put capitalism to work for impoverished communities; not surprisingly, their laudable purpose got lost along the way. In describing the story of Opportunity Zones, from their genesis in a billionaire’s brain to their failure on the ground, Wessel’s writing shines. His inside baseball look at how lawmakers and lobbyists introduce and pass legislation in Washington – including the maneuvering and horse-trading along the way – makes for a fascinating read. 

Summary

Opportunity Zones (OZs) offer investors a way to avoid capital gains taxes and, in theory, simultaneously benefit distressed communities.

Massive amounts of money sit in stocks and bonds, companies, real estate and other assets, often awaiting the death of the owner because only then, as an inheritance, can it escape capital gains tax. OZs offer that money a way out: Investors can place their capital gains into these designated communities across the United States and qualify for capital gains tax deferments. At the same time – in theory – the money raises housing developments, finances businesses and benefits communities in myriad ways. Investors who leave their investments intact for at least 10 years earn complete tax forgiveness.

OZ legislation became law in the United States in December 2017. But the notion of offering tax incentives for investments in poor neighborhoods was nothing new. Back in 1980, UK Enterprise Zones offered investors a free ride on capital gains taxes. There, however, designation of the zones was strictly controlled at the national level. The scheme produced some notable successes, such as the Canary Wharf development ...

About the Author

Pulitzer Prize–winning economics journalist David Wessel wrote for The Wall Street Journal for 30 years. He now serves the Brookings Institution as a senior fellow and director of the Hutchins Center on Fiscal and Monetary Policy. 

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