Tuesday, August 12, 2014

$1B Tax Credit for Poor Areas Going to Big Banks

A federal tax credit intended to help revitalize struggling, impoverished communities is, in some instances, being used by big banks to open new luxury businesses and exhibits that don’t benefit the low-income people it was meant to help.
The New Markets Tax Credit was created nearly 15 years ago to offer banks an incentive to invest in small businesses in low-income areas with the hope that more jobs could be created in those communities. But little oversight over the credit, which equals 39 percent of the investment, has auditors and lawmakers questioning whether it’s a good use of taxpayer dollars.
Two new reports released today from the Government Accountability Office and Sen. Tom Coburn’s (R-OK) office raise issues with the program, which costs at least $1 billion every year.

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