New Chattanooga Tax Credits Could Invite Crony Capitalism

Hamilton County officials are handing out federal tax credits to investors and other developers so they’ll spruce up blighted areas, but some people worry politicians will only give these credits out to friends and political donors. Government bestowing preferential treatment upon certain businesses — but not others — is called crony capitalism. In this case, county officials decide who gets what for what are known as Opportunity Zone tax credits. According to the Chattanooga Times Free Press, these Opportunity Zone tax credits allow investors to avoid capital gains taxes if they invest their capital gains in zones designated as distressed or blighted. Exactly 743 low-income census tracts qualified statewide. Hamilton County Mayor Jim Coppinger selected 17 census tracts for his area, which Tennessee Republican Gov. Bill Haslam approved, according to the paper. Davidson County got 18 Opportunity Zones. Shelby County got 32. No one in Coppinger’s office returned The Tennessee Star’s requests for comment this week, but the Times Free Press said he had a tight deadline to select winners. Helen Burns Sharp of the Chattanooga-based Accountability for Taxpayer Money said the potential for cronyism is “as clear as can be.” “This enterprise zone designation, yes, when you start looking…

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