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Abstract

This article examines the Reagan Administration's practice of creating enterprise zones in blighted urban areas. Enterprise zones are small areas which offer tax abatements and other incentives to to businesses willing to locate within the boundaries of the zone. The author acknowledges that this practice is not new, but argues that the Reagan administration would be the first to offer major incentives to encourage the private sector to undertake the task of rebuilding the nation's most impoverished areas. This article examines the Kemp-Garcia bill, which provides that enterprise zones are to be designated by the Secretary of commerce at the request of local and state governments. It analyzes the bases of authority for the Kemp-Garcia tax abatements and discusses the constitutional requirements imposed by state and federal uniformity and equal protection clauses. It further investigates previous incentives designed to stimulate private enterprises, and examines the particulars of the Kemp-Garcia bill itself. Finally, it make recommendations for consideration of this bill and future enterprise zone legislation.

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