We respectiveley disagree.
"...Speaking for the Democrats, Detroit Mayor Dennis Archer described Bush's domestic plan as 'repackaged ideas' that came from Education Secretary Richard Riley and Housing Secretary Andrew Cuomo."
"Everything else (Bush) is saying relies on the heavy use of tax credits and tax breaks and that will take us back to where his father and President Reagan took us before,' Archer said..." This quote says it all. See the NY Times on Bush.
The Mayor of Detroit did not read yesterday's morning Wall Street Journal at page A32, like his counterparts at GM may have and seen the headline "Congress Is Set to Debate Ways of Renewing Poor Areas" under the heading Politics and Policy Section. On the last column of the full page article was the Sub Title "Immediate Benefit," and the following was said "...But the benefit should be available immediately while the GOP provision for renewal communities isn't likely to start providing benefits for several years, Democratic analysts say..."
Would you rather own an Enterprise Zone Business [EZB] in an upcoming Renewal Community, to be adopted, effective January 1, 2001, and then wait five  years to get ZERO CAPITAL GAINS on all gains earned after January 1, 2001, or be able to roll over all capital gains, whenever earned, on an EZB, effective July 15, 2000? We believe the latter is the better deal.
We are very interested about Detroit [could their Canadian neighbors come into Detroit to do business?], Los Angeles, Desert Communities, Chicago, and the other thirty-one  Empowerment Zones that clearly have this tax incentive for their EZB, which is broadly discribed in IRC Section 1397B [it includes commercial real estate, restaurants and hotels/motels, law firms, accounting firms, brokerage firms, and Dot-Com Companies], and hopefully all the other Ninety-Five  Enterprise Communities will get the same thing.
Or, by the way the capital gains from the sale of an EZB, that apparently have been held five or more years [from when we do not know, but maybe as of December 10, 1994], will have the use of IRC Section 1202 but with the exclusion at 60% vs. the current 50%. That may mean all capital gains earned from that date will be covered, and all gains prior will be fully taxed at the then capital gains rate [20%]. The 60% exclusion, based on the 28% rate makes the effective rate 11.2%. We like the ZERO rate for all gains under IRC Section 1045.
In summary, every piece of commercial real estate in an Empowerment Zone [or Enterprise Community if we are successful] could now be covered under IRC Section 1045, effective when the President signs the bill, as could any other EZB as defined. To the extent that term IRC Section 1397B requires having 35% of the employees from the area, employment could go up immediately in the Detroit Empowerment Zone since some people might want to qualify beginning on or about July 15, 2000. We suggest to Mayor Archer that item alone is something he and his followers could appreciate, if he understood it; TAX incentives do matter.
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.