In addition to the breaks listed above, S. 1852 would also amend the tax code to allow for:
A $5,000 tax credit granted to students living in Economic Freedom Zones who are attending elementary or secondary school.
The creation of a tax-exempt educational savings account for people living in Economic Freedom Zones.
tax credit, rather than a tax deduction, for people who donate to charities that serve people in Economic Freedom Zones.
The Elementary and Secondary Education Act of 1965 would also be amended to give special grant funds to children whose families live in Economic
Freedom Zones and for those with incomes below the federal poverty level.
And to widen the pool of investors, the Secretary of Homeland Security (DHS) and Secretary of Labor would be given the power to
issue Special Economic Freedom Zone Visas to immigrants that meet educational
& skill requirements that want to enter the U.S. to invest in
Economic Freedom Zones.
Economic Freedom Zones aren’t a new idea. S. 1852 is in many ways, a revival of Jack Kemp's "Urban Enterprise Zones" introduced during the Reagan administration in the 1980’s. These zones encourage economic activity by reducing taxes and regulations, while
expanding educational opportunities. The concept reincarnated in sponsoring Rep. Rand Paul's (R-KY) bill has gained attention from the other side of the aisle with Sen. Cory Booker (D-NJ) and former Governor Jennifer Granholm (D-MI) expressing support.
However, not all Democrats have warmly received Senator Paul’s bill. Congressman Carl Levin (D-MI) gave Paul’s bill a mixed review,
saying that there needs to be more federal investment in infrastructure
and social services. For his part, President Obama has introduced a
similar mix of policies — "Promise Zones".
The Promise Zones are similar in terms of their focus on reducing taxes
and regulations, but they also allow for federal spending on housing and infrastructure.
similarities between Senator Paul’s Economic Freedom Zones and
President Obama’s Promise Zones led Democratic strategist Douglas Schoen
to note that there is room for compromise, but it remains to be seen if that opportunity will be embraced.
Press Release from sponsoring Senator Rand Paul (R-KY)
Economic Freedom Zone Policy Paper from Senator Rand Paul (R-KY)
(Photo Credit: Bob Jagendorf)