If there’s a cure-all for bringing down-and-out communities out of the dumps shouldn’t it be a permanent part of the tax code? That’s the argument of more than 1,200 banks, charities and businesses, led by the New Markets Tax Credit Coalition, in a September letter sent to Congress calling for a permanent credit.
The New Markets Tax Credit leverages private sector capital for investment in poor communities with high unemployment to help build commercial and industrial facilities, schools, day care centers, and supermarkets. Part of the reason the credit is so important is that federal spending on community development through the Department of Housing & Urban Development, the Department of Agriculture and the Department of Commerce has been cut by 75% as a share of GDP from 1980 to 2010, so for lots of communities this credit is the way they finance the kinds of projects that used to be funded on the spending side, says Bob Rapoza, a spokesperson for the Coalition. With the credit, you get private sector support from the likes of U.S. Bancorp., J.P. Morgan Chase, and SunTrust Banks STI +0.62% for these projects; they get a tax write-off for investing in the communities typically through a middleman—a community development entity.
[button link=”http://www.forbes.com/sites/ashleaebeling/2013/09/18/banks-press-congress-to-renew-neighborhood-revitalization-tax-break/?partner=yahootix” color=”silver”] Read more…[/button]