How the rich get richer (of course) with the so-called poverty subsidy.
Years ago, a Texas legislator who was occasionally known to take lobbyists’ cash in exchange for a vote, explained his ethical framework as opportunistic: “I seen my chances, and I took ’em.”
Likewise, such hustlers as Dan Gilbert (the billionaire founder of Quicken Loans), Michael Milken (the disgraced Wall Street finagler), Stephen Ross (a Florida real estate magnate and owner of the Miami Dolphins), and Jeff Vinik (a Tampa developer of luxury properties) have seen opportunistic chances in Donald Trump’s program of Opportunity Zone tax breaks — and grabbed them. The new tax law was trumpeted as a channel for funneling new investments into poor communities. But the billionaires — all of whom happen to be Trump’s buddies — jumped on it like chickens on a cricket.
They devoured the poor people’s tax subsidy to underwrite luxury projects they were already developing. To see two textbook cases of how plutocrats rig the system, first, consider Kevin Plank’s scam in Baltimore. He’s the billionaire owner of the sports apparel outfit Under Armour. He was struggling to market a track of vacant downtown land called Port Covington as an upscale address, and then he discovered Trump’s new tax break. But alas, Plank’s tract was not in a low-income zone, so it didn’t qualify.
But — Eureka — the billionaire found a loophole! If a piece of property was within an old “empowerment zone,” it could qualify for the taxpayers’ subsidy. Alas again, Port Covington was not inside the qualifying zone, but next to it. However, an old mapping mistake showed that a tiny slice of Plank’s property line ran under a highway overpass, just inside the zone. Based on the map’s error, Maryland Governor Larry Hogan and Trump’s Treasury Department quickly certified every inch of the Port Covington tract as an Opportunity Zone eligible for the full poverty subsidy.
The Opportunity Zone provision in The Donald’s $1.5 trillion giveaway to corporate elites was a token gesture meant to show some concern for the poor. The idea was to give a new set of tax breaks to developers to lure them to invest and build in low-income neighborhoods. Which brings me to a second example of plutocratic plunder. This “anti-poverty” tax break is going to projects such as the Rybovich SuperYacht Marina on a stretch of the tony waterfront of West Palm Beach, Florida.
Rybovich is a “luxurious resort-style” marina for the $100 million football-field-sized yachts of the superrich. Not your typical poverty zone. Yet, Trump gloated that “the biggest beneficiary of this tax scheme “is African Americans.” But Wayne Huizenga Jr. is not noticeably African American. He is, however, the politically connected owner of the Rybovich Marina — as well as being the billionaire heir to the fortune of Wayne Huizenga Sr.
Daddy Huizenga, who died last year, was a corporate baron, owning Waste Management Inc. and Blockbuster Video, and he was a major Trump donor and plutocratic pal. Father and son were also big money backers of Rick Scott, the notoriously sleazy Republican governor of Florida, who had authority under Trump’s Opportunity Zone program to designate which poverty areas were eligible for the multimillion-dollar tax subsidies. Obviously, an opulent superyacht marina does not qualify for anything called a “poverty subsidy.”
But… money talks. Huizenga Jr. simply asked his buddy the governor to give the tax break to him, and — shazam! — Scott waved his magic gubernatorial wand and transformed the posh marina into a poverty zone — an area in which Huizenga himself had just bought a $5 million house. The tax subsidy he’s been given could cover the cost of that house, but we won’t know because Trump’s law requires no disclosure of who gets how much of a tax handout.
Even more disgusting is that, because the law limits the number of Opportunity Zone projects, slipping in these luxury projects means actual poverty-stricken areas get rejected.
And that’s how corporate and political elites conspire to rig the system, blatantly ripping off money meant to help poor people to make the rich richer and increase inequality in America. Plutocracy in action.
Sen. Ron Wyden has introduced an Opportunity Zone Reform Act to stop this immoral scam. For more information, go to Finance.Senate.gov.