Senate Finance Committee bill would make opportunity zones permanent

Sen. Mike Crapo (R-Idaho) speaks during the confirmation hearing for Robert F. Kennedy Jr. as secretary of Health and Human Services, before the Senate Finance Committee on Capitol Hill in Washington, Jan. 29, 2025. (Kenny Holston/The New York Times)

By The Star Staff

The U.S. Senate Finance Committee’s version of the tax and spending bill that President Donald Trump is pushing for includes a new provision to make the opportunity zone program permanent.

Almost 90% of Puerto Rico was designated an opportunity zone several years ago. An opportunity zone is an economically deprived community where new investments, under certain circumstances, may be eligible for a preferential tax treatment.

Besides the opportunity zone provision, Senate Finance Committee Chair Mike Crapo’s (R-Idaho) version of the bill contains a slew of provisions such as business breaks for research and investment expenses, expanded Child Tax Credit, a new charitable break, the New Markets Tax Credit program, and others that would become a fixture of the code in his plan.

According to a Politico report, Crapo digs more deeply into Medicaid, a proposal that is now alarming some of his colleagues. Crapo also wants to scale back a number of tax benefits in the House version of the plan, including provisions lawmakers want to use to boost voters’ refunds next year ahead of the midterm elections.

Crapo is proposing a smaller increase in the Child Tax Credit for example, and he’d put off a proposed hike in the standard deduction by a year, the report said.

“I’m trying not to create cliffs in the tax code,” Crapo told reporters Tuesday.

Economists generally believe permanent provisions are better for growth because it makes it easier for businesses to plan. But lawmakers have long tried to reduce the cost of tax legislation, at least on paper, by making them temporary, knowing that the provisions will probably eventually be reupped.

There are 16 tax provisions in the House draft that are due to expire in coming years. Extending those would cost an additional $1.4 trillion, not including $687 billion in extra interest payments. That would be on top of the House plan’s official $2.4 trillion sticker price, according to Politico.

An official cost estimate of Crapo’s proposal is not yet available.