Over the past eight months, families across the country have seen significant benefits from last year’s tax reform package. More than 4 million Americans have received bonuses or wage and benefit increases and over a million jobs have been created since tax reform’s passage. The child tax credit and standard deduction were doubled, and the average family of four making around $73,000 a year will save more than $2,000 on their taxes next year.
From bankers to farmers, Iowans are seeing real savings in their pockets because of tax reform. In this year alone, Iowans will save $1.775 billion in federal income taxes. And, thousands of Iowa employees across the state are receiving one-time bonuses or contributions to their retirement accounts. In Iowa, we know that wage increases, bonuses and more money in our paycheck is important. This means real results for local economies and local communities.
We are excited to visit the Des Moines Dream Center and the Phenix School Apartments in West Des Moines on Friday to talk about another very important part of tax reform – the creation of Opportunity Zones. In May, the Treasury Department approved 62 of these zones across Iowa that were proposed by Governor Reynolds, and these areas are now eligible for a significant influx of private investment.
Senator Scott’s Investing In Opportunity Act, which was accepted as part of tax reform and created the Opportunity Zones initiative, incentivizes long-term investment in low-income and distressed communities by offering a deferral of capital gains taxes for investors. More than 52 million Americans, including approximately 90,000 Iowans, live in these distressed communities, and there are currently more than $6 trillion in unclaimed capital gains across the country. That’s a huge potential pool of dollars to help those who need it most.
Opportunity Zones will help unlock the potential of these communities, from the heart of Des Moines to rural areas across the state. The U.S Treasury Department continues working to finalize the rules, and we anticipate projects ranging from investing in small businesses and entrepreneurs, to educational programs for our children and affordable housing for our families to infrastructure and high-speed internet projects. The potential is truly amazing.
Perhaps our favorite part of the Opportunity Zones program is that it is powered from the ground up, not the federal government in Washington, D.C.
Zones were nominated by mayors and governors, because folks here at home in Iowa know where help is needed the most. Unlike other programs attempting to help those in need in the past, there is no federal bureaucracy created by Opportunity Zones, meaning red tape will not get in the way.
So many families and communities are limited not because of a lack of ingenuity, but simply a lack of opportunity. They have lost hope, or felt like the door to a better job or higher salary is closed. We are proud to say that with the passage of tax reform, this no longer has to be a reality. Opportunity Zones can help power a renaissance in communities across Iowa, and reopen those doors families thought were closed.