National Journal Article on Tax Credits Aimed at Helping Middle Class and Low Income People
A statement by Bob Rapoza, spokesperson for the NMTC Coalition:
I read with interest the National Journal article today on the use of the tax code to help the middle class and low income people, especially since one of the tax credits discussed was the New Markets Tax Credit (NMTC). We appreciate the focus on NMTC and the discussion it prompts.
The title, “When Congress Plays Robin Hood … and Fails,” was a bit disconcerting. We are confident that the hundreds of thousands of low income Americans who have benefited from the Credit would characterize this program as a great success for them and their families. NMTC is a modest federal subsidy – the benefits from this Credit go to communities and low income people in terms of jobs, better services and facilities, and improved local economies.
Unfortunately, flawed and inaccurate GAO conclusions from its August 2014 report on the NMTC continue to circulate widely despite our best efforts to clarify the data and analysis they provided; we very much appreciate the author’s inclusion of the NMTC Coalition’s response. Using Department of Treasury data, the Coalition outlined several conclusions in that response which demonstrate the GAO’s lack of understanding when it comes to the NMTC program and how it works.
Specifically, the GAO’s conclusion found on its first page describing an investor that was able to claim $1.2 million of credits leveraged entirely with $2.5 million worth of state and federal historic tax credits was “walked back” later in the report. Their description of the transaction was at variance with industry practice and based on incomplete information. For that reason, the GAO conceded on page 13 of the report that such a large return probably was not the case.
A complete response on the GAO and Coburn reports can be found here.