Questioning a Cornerstone of Urban Aid Plans; Enterprise Zones Have Broad Support, but Critics and Advocates Wonder: Do They Really Fight Poverty?
One of the questions facing Congress as it moves toward action on an urban aid package is whether enterprise zones represent an efficient way to fight poverty.</br></br>The long-range urban aid legislation now being discussed in Congress almost certainly will include such zones, which some conservative Republicans have advocated as sound urban policy for the last decade.</br></br>President Bush has made enterprise zones a key part of his proposed six-point urban agenda. Democratic leaders of Congress have expressed a willingness to accept enterprise them under certain conditions, and big-city mayors also expressed support for the idea this week at their national conference in Houston.</br></br>At its core, such legislation would authorize tax breaks to attract businesses to distressed areas. If enacted, it would breach a consensus, reached in the 1986 tax bill, against using the tax code for other than fiscal purposes.</br></br>The types of tax breaks that the federal government should offer is another issue in the current debate. The administration wants to rely more heavily on cuts in capital gains taxes, while Democratic congressional leaders have emphasized tax credits for creating jobs.