MPAC's Critique of Opportunity Zones in NJ Tech Weekly
This post appears in NJ Tech Weekly and may be viewed here: https://njtechweekly.com/angels-others-react-to-new-opportunities-provided-by-angel-tax-credit-expansion/
For Michael President Anderson, cofounder and CEO of MPAC Solutions (Newark), the incentives do not go far enough in creating opportunities for people of color.
“Any tax credits for investments in opportunity zones should reflect the demographics of the Opportunity Zone. For instance, in an opportunity zone in Newark that is 90 percent Black and Afro-Indigenous, tax credits or exemptions should only be allowed for investment in companies or projects with significant Black and Afro-Indigenous leadership. Governor Murphy must create rules and best practices around systematic economic enfranchisement in New Jersey,” he said.
“With regard to the 170+ Opportunity Zones, only investors that have capital gains benefit from opportunity zone investment policies. Who has significant capital gains? The people who benefitted from the status quo … a status quo that institutionally paralyzed people of color. For instance, Blacks have become nearly two-thirds of the prison population, while only constituting one-eighth of the general population.
“I’ve listened to EDA head Tim Sullivan and Governor Murphy promise diversity in venture investing, while supporting firms and an ecosystem that deliberately marginalizes whole communities and punishes champions of inclusion that speak out against financial injustice. Without concrete stipulations and uncomfortable yet progressive conversations around social equity, we will continue to see minorities and women only earn 7 percent of the state’s contracts, as was the case in 2018.
“This past quarter, women earned 3 percent of all venture capital, which continues to experience its largest funding periods as an asset class. Everyone suffers when we block economic progress for all or create policies that dance around the changes necessary.
“I am in favor of innovation. I do not trust the effectiveness of any proposed investment initiative that is not followed up with programmatic equity partnerships on the part of corporations and government, which currently power the state’s VC pipeline and supply the investment firms that fail the people with dry powder. Only programmatic equity partnerships with minority investors, and dedicated capital from corporations, governments, sports teams, universities, etc., will lead to sustainable economic development, and create diverse inclusive wealth.
“I challenge Governor Murphy to work with MPAC, and our allies in local and federal government working to stimulate minority businesses. Private investors without genuine interest in creating diverse wealth are misleading the public about making a difference, while avoiding their fair share of tax contributions. Unfortunately, we the people are financing investors that are excluding us from the largest era of wealth creation in American history. We need to have an honest, open conversation followed up with action that catalyzes innovation through programmatic investing with stakeholders that represent underserved communities.”