2019 Menino Survey of Mayors

The 2019 Menino Survey of Mayors represents the sixth nationally representative survey of American mayors and is based on interviews with 119 sitting mayors from 38 states. The 2019 Survey explores mayoral views on issues ranging from infrastructure and transportation priorities — including mobility and public safety — to the changing nature of work. The 2019 Survey also provides the first in-depth examination of mayors’ reactions to and expectations for the Opportunity Zones program, a significant new federal initiative to stimulate urban development. The 2019 Survey continues with the support of Citi Community Development and The Rockefeller Foundation.Citi Community Development and The Rockefeller Foundatio

Lawmakers as Job Buyers

In 2013, Washington State authorized the largest state tax incentive for private industry in U.S. history. It is not remarkable for a state legislature to use tax benefits to retain a major employer—in this case, the global aerospace manufacturer Boeing. Laws across all states and thousands of cities routinely incentivize companies such as Amazon to relocate or remain in particular areas. Notably, however, Washington did not recover any of the subsidies it authorized despite Boeing’s significant post-incentive workforce reductions. This story leads to several important questions: (1) How effective are state and local legislatures at influencing business-location decisions?; (2) Do such incentive programs actually achieve their goals of increasing and maintaining jobs?; (3) Is the public protected from imprudent spending? This Article looks specifically at the role of state and local governments in encouraging businesses to locate in their jurisdictions. In such cases, state and local lawmakers act as buyers of jobs. This Article argues for a two-step proposal to limit subnational government actions to incentivize business-location decisions. The first step involves a bidding process where companies are awarded incentives based on the lowest subsidy dollar amount required to create or retain a job of a certain quality or pay rate. The second step involves defining job metrics based on certain preconditions and recapturing incentives should a company fail to maintain or achieve a defined number of job and qualities inherent in each job. This two-step proposal has regulatory benefits and it mollifies the political concern for jurisdictions to appear competitive and the need for public financial protection

Federalizing Tax Justice

The United States is the only large federal country that does not have an explicit way to reduce the economic disparities among more and less developed regions. In Germany, for example, federal revenues are distributed by a formula that takes into account the relative level of wealth of each state (the so-called Finanzausgleich, or fiscal equalization). Similar mechanisms are found in Australia, Canada, India, and other large federal countries. The United States, on the other hand, has no such explicit redistribution. Each state is generally considered equal and sovereign, and the federal government does not distribute revenues to equalize the states’ spending capacity. While the overall impact of the federal tax and transfer system may be to shift revenues from richer to poorer states, this is not openly acknowledged, and that impact is generally condemned in existing literature as unfair to the states that send more revenues to Washington, D.C., than they get back in federal transfer payments. Nor is it politically likely that the U.S. will adopt a formal fiscal equalization mechanism, because—unlike Germany or Canada—it decisively settled the problem of secession in the Civil War and therefore does not fear a potential break-up along regional lines. This Article proceeds from the normative position that the increasing gap between the richer and poorer areas of the United States is a problem that requires federal intervention, and that the federal tax system can play a role in that intervention. There is increasing evidence of a yawning economic gap between the heartland and the coasts of the U.S., which translates into higher permanent unemployment and minimum wage employment, opioid abuse, imprisonment, and premature death. This gap contributed to the political division of the country revealed in the 2016 presidential election and needs to be addressed if we want to prevent ever further polarization

Midwest Opportunity Zones: A Regional and Comparative Analysis of Tract Selection

Opportunity Zones were implemented within the Tax Cuts and Jobs Act of 2017 to bring jobs and investment to low-income communities. States were given authority to choose which of their census tracts would be given Opportunity Zone status, and previous research has been conducted to investigate if selected tracts were the ones with the most distress. This study expands upon past national research to investigate state-level Opportunity Zone tract selections and processes by using a sample of seven Midwest states. The results provide an explanation for national studies seeing variance in levels of Opportunity Zone distress by state, and it found that states had differing selection processes, goals in tract selection, and levels of initial distres

Human Capital Prospective on Corporate Opportunity Identification

Entrepreneurial activities within firms have been a centre of attraction for researchers in past years. Human capital is yet another unexplored prospective affecting and contributing towards entrepreneurship. To understand how individual operate entrepreneurially within firm, we intend to explore how human capital is developed and how structure and practices in internal and external environment of the firm (in this case focusing on Samsung Electronics Corporation) affects human capital development, management and vice versa. In addition to examining the provided framework we also analyse human capital from innovation prospective. Therefore, the paper contributes towards existing literature in two ways: firstly, we exploring and expanding the current framework of corporate opportunity identification and human capital to incorporate innovation. Secondly we provide evidence to support current research through a case analysis and also provide factors to examine in further researc

Missed Opportunities: The Impact of Opportunity Zones on Small Business Development in New York City

In 2017, the Tax Cuts and Jobs Act introduced the Opportunity Zone (OZ) program to stimulate investments in low-income tracts across the United States through capital gains tax incentives. The goals of the program are to spur economic growth and job creation nationally, however, there is currently no consensus on the impact of place-based policies like OZs. Existing literature examines the impact of OZs on broad economic growth and real estate with few papers focusing on their impacts on job creation or in urban cities. Given that place-based policies like OZs are based on economic theories of agglomeration economies, OZs have unique effects on urban cities. Addressing this lacuna, this paper examines (1) the impacts of OZs on small businesses—significant sources of job creation in New York City—and (2) the impact of OZs on a high-density city like New York. A difference-in-differences regression analysis of small businesses in designated and in eligible but not designated census tracts is used to identify OZ impacts on key metrics like changes in the number of small businesses and the number of employees per census tract. Ultimately, I find that the OZ program has not had any statistically significant nor economically significant impacts on small business outcomes in New York City due to the profit-driven structure of the policy

Opportunity in Ohio: Rethinking Northeast Ohio\u27s Opportunity Zones with Local Legislation

Welcome to Census Tract 1186.02! Here, in a small sliver of Cleveland’s Glenville neighborhood, tucked between Superior and Hough Avenues, you will uncover a lot. You will discover a rich history of the city’s ethnic and cultural roots. You will also find gang violence, underperforming schools, a median household income of $9,526, and a poverty rate of 66.5 percent. Something you will not find in 1186.02 is investment. Private or public, money is not flowing in to 1186.02 and it has not for a long time. The substantial toll of continuous underinvestment on the residents of this neighborhood, one of Cleveland’s poorest, is palpable and the need for relief is clear. This relief recently became possible when 1186.02 was designated as a Qualified Opportunity Zone by the U.S. Treasury Department. This designation, made available through the Tax Cuts and Jobs Act of 2017, could be a watershed moment for Glenville. By providing significant federal tax benefits to investors, Congress hopes to encourage a massive inflow of investment into low-income communities, like Glenville, that have long suffered from perennial underinvestment. Unfortunately, the hope of relief for Tract 1186.02 and its residents will likely be short-lived. Because the federal Opportunity Zone provision was written too broadly, it not only permitted too many designations, but it also allowed for the designation of numerous not-so-poor neighborhoods. In other words, the law pits communities that need the investment most—like Glenville—against neighborhoods that are much better-off—like Cleveland’s downtown core and trendy Tremont neighborhood. For context, there are tracts in the city’s downtown core and Tremont neighborhood that were designated with median household incomes that septuple (i.e. seven times as much) those in 1186.02. The odds that areas like Glenville can outcompete such better-situated areas for private investment dollars are slim-to-none. As a result, the residents of 1186.02 will be left behind again. But it does not have to be this way. It is not too late for the City of Cleveland and Cuyahoga County to take advantage of the many positive aspects of the Opportunity Zone provision, while ensuring that those benefits are directed towards their most-in-need neighborhoods. By enacting local legislation that targets these underdog tracts for additional services and public investment, this Note argues Cleveland and Cuyahoga County can level the playing field and provide neighborhoods like Glenville and tracts like 1186.02 with the competitive advantages they need to rediscover their potential

Bridging the Red-Blue Divide: A Proposal for U.S. Regional Tax relief

The United States is the only large federal country that does not have an explicit way to reduce the economic disparities among more and less developed regions. In Germany, for example, federal revenues are distributed by a formula that takes into account the relative level of wealth of each state (the so-called Finanzausgleich, or fiscal equalization). Similar mechanisms are found in Australia, Canada, India, and other large federal countries. The United States, on the other hand, has no such explicit redistribution. Each state is generally considered equal and sovereign and the federal government does not distribute revenues to equalize the states’ spending capacity. While the overall impact of the federal tax and transfer system may be to shift revenues from richer to poorer states, this is not openly acknowledged, and to the extent it is discussed in the literature, it is generally condemned as unfair to the states that send more revenues to Washington than they get back in federal transfer payments. Nor is it politically likely that the US will adopt a formal fiscal equalization mechanism, because unlike Germany or Canada it decisively settled the problem of secession in the Civil War and therefore does not fear a potential break-up along regional lines. This Article proceeds from the normative position that the increasing gap between the richer and poorer areas of the United States is a problem that requires federal intervention, and that the federal tax system can play a role in that intervention. There is increasing evidence of a yawning economic gap between the eastern heartland (the region between the Mississippi and the eastern slope of the Appalachians) and the rest of the U.S., which translates into higher permanent unemployment and minimum wage employment, opioid abuse, imprisonment, and premature death. This gap contributed to the political division of the country revealed in the 2016 presidential election, and needs to be addressed if we want to prevent ever further polarization. The Article first assesses past and current attempts to enact tax provisions to help disadvantaged regions in the United States. On the federal level the prime example is Internal Revenue Code (IRC) section 936, which provided tax breaks for investments in Puerto Rico. This section was widely criticized and was ultimately repealed in 1996 with a ten-year phase-out. The Article will argue that in fact the evidence shows that 936 was quite successful in creating and maintaining jobs in the territory, and that its repeal led directly to Puerto Rico’s current economic problems, which began when section 936 was finally abolished in 2006. A contrary example was IRC section 199, the domestic manufacturing deduction, which was intended to stimulate manufacturing in low-growth areas like the rust belt, but was captured by coastal industries like software and entertainment and was ultimately repealed in 2017 because it was widely conceded to be ineffective. Its replacement, the Foreign Derived Intangible Income (FDII) provision in the Tax Cuts and Jobs Act of 2017 (IRC section 250), is geared toward aiding exports by intangible intensive industries and is therefore more likely to help the richer areas where these industries are located. On the state and local level, there exists a proliferation of tax incentives, but in many cases they do not result in successful development, and they tend to confer windfalls on multinationals who would have invested in the US anyway and to favor investment in already rich cities, such as the twenty finalists and the ultimate winner on Amazon’s list of candidates for its second headquarters. The Article then takes a comparative perspective by surveying several more or less successful tax measures taken to encourage development of less developed regions, including in China and Israel. Finally, the Article develops a proposal for using federal taxes to influence multinationals to invest in poorer locations. It builds on an existing list of approved targets, namely the so-called “opportunity zones” created by the 2017 tax reform. Opportunity zones are limited to census tracts that have at least a 20% poverty rate or are below 80% of the state or city median income. An investor in an opportunity zone gets a tax break, although it is limited to gains that she has already made from other investments. The opportunity zone provisions have been widely criticized as only helping investors and not being limited to people and areas in need. We would limit our proposal to opportunity zones in the target area, i.e., between the Mississippi and the eastern slope of the Appalachians, and exclude major metropolitan zones in that area. We propose that the federal government should declare that a corporation that invests in an opportunity zone in the target area would pay no federal tax on profits from that zone. To define profits from the opportunity zone and segregate them from other profits, we suggest using a formula like the one the states use: take total corporate profit and multiply it by [(wages paid to employees in the opportunity zone divided by total wages) plus (number of employees in the opportunity zone divided by total employees)]/2. This type of formula should work to incentivize corporations to move jobs to the preferred areas. With jobs come homes, good schools and everything else the richer areas of the United States already have in abundance

A Typology of Place-Based Investment Tax Incentives

This Article makes several contributions to tax, poverty, and empirical legal literature. First, it defines the category of place-based investment tax incentives and identifies key elements of variation across the category. Despite their prevalence at all levels of government, place-based investment tax incentives remain undertheorized and largely undefined in the literature. The typology presented here reflects an analysis of three federal tax incentives (the New Markets Tax Credit, the Low-Income Housing Tax Credit, and the new Opportunity Zones law) and a detailed survey of tax incentives included in state enterprise zone laws. By defining this category of tax laws and identifying the basic types of place-based investment tax incentives that exist—or may not yet exist—under current law, this Article helps situate the conversation about these tax laws within broader tax policy debates. Second, the typology presented here can be used by both tax and poverty law researchers to help assess the applicability of existing empirical studies to specific types of place-based investment tax incentives. Social scientists have published dozens of impact studies focusing on a wide variety of place-based investment tax incentives. Those studies, which have focused on both state and federal tax laws and their impact throughout the country, have sometimes reached contradictory conclusions. The ability of legal researchers to advance the debate over place-based investment tax incentives—and to predict the impact of new laws like Opportunity Zones—depends upon making sense of these studies. Third, this Article identifies areas for further legal and empirical research. As will be explained, community-oriented types of place-based investment tax incentives, which contain features specifically designed to benefit residents of poor communities, are uncommon under existing law. These rare types of tax incentives are theoretically promising and enjoy some empirical support; nevertheless, due in part to their rarity, they have been largely understudied. The most complete understanding of place-based investment tax incentives, therefore, will require additional research about the ideal design and impact of community-oriented investment tax incentives