Gulf Opportunity Zone Would Spur Quicker Recovery

By Aaron Rice
November 28, 2005

Congress is working on legislation to create a Gulf Opportunity Zone, or GO Zone, and our state legislature should create one as well.

A GO Zone should offer short-term tax breaks to encourage businesses to act quickly to buy equipment, build or rebuild facilities, and hire workers. For instance, capital gains taxes should be eliminated for investments in job-producing businesses in the region over the next two years. Also, the tax law should allow equipment and most other capital costs to be written off in the year purchased instead of depreciated over time.

Some people will say these are corporate tax breaks that will benefit only the wealthy. But in the real world, smart investors will put their money where it will make the greatest return. If the cost of doing business is reduced by lowering the tax bill, investors will be more likely invest in southern Mississippi businesses instead of in other places. This means more jobs, more quickly, and it means that the local tax base will rebound more quickly because of the property taxes that would be paid to local governments on these investments.

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