The Tax Cuts and Jobs Act of 2017 updated the Internal Revenue Code to establish opportunity zones (OZs), which aim to incentivize private investment in economically distressed communities defined by the Department of the Treasury. The recently passed reconciliation bill made these benefits permanent and, importantly for the Midwest, established new qualified Rural Opportunity Zones that provide even greater tax incentives. OZs represent an effort to effectively tap into the concept of “megaregions”–multiple towns and cities connected by shared economies, cultures, and infrastructure for industrial and economic development. Instead of focusing on a single urban area or factory, OZs help catalyze megaregional investment across a variety of sectors, linking communities through hard and soft infrastructure and commercial activity that uplift entire local economies, not just the defense sector.

This policy tool could be a critical element for revitalizing America’s maritime industry, and Midwest communities are competitively positioned to benefit from these investments. The 2024 executive order on shipbuilding directed the establishment of Maritime Prosperity Zones that leverage the definitions of the 2017 OZs, but apply their benefits to the creation of maritime industrial capacity. Maritime Prosperity Zones could not only build the infrastructure, ships, and weapons systems needed for a new era of global competition, but also support and upskill workforces, expand educational opportunities, and bolster local economic growth.