Back in 2000 President Clinton signed into law the New Markets Tax Credit program, which was supposed to spur private investment and job creation in low-income communities. A new report by Sen. Tom Coburn (R-OK) finds instead that big banks have benefited from more than $1 billion annually. Coburn documented such expenditures as a health center in a luxurious Hawaiian island resort community, an Atlanta aquarium dolphin exhibit featuring dozens of Hollywood celebs, and an antique car museum in Tacoma, Washington. As the Washington Examiner’s Susan Ferrechio reports:
The list goes on, and is accompanied by a new report by the Government Accountability Office, which also found significant fault with the tax credit program. According to the GAO, nearly two-thirds of the projects funded by the program received other public funding, rather than private funding the program was supposed to attract. …
“A majority of NMTC-financed projects utilize more than one source of public funding, despite the purpose of the tax credit being to leverage private investment,” the GAO report found.
Officials with the NMTC program, administered in part by the U.S. Treasury, did not return a request for comment, but according to the program website, the fund has awarded $40 billion in tax credits in 836 different awards to investors since its inception.
As Coburn rightly summed up:
“The New Markets Tax Credit is a reverse Robin Hood scheme paid for with the taxes collected from working Americans to provide pay outs to big banks and corporations in the hope that those it took the money from might benefit,” Coburn said in a statement. “When government picks winners and losers, the losers usually end up being taxpayers.”