The De-Gentrification of New Markets Tax Credits

Résumé du livre

This article provides the most comprehensive analysis to date of the New Markets Tax Credits (NMTCs) program established by Congress. The purpose of the program is to use tax credits as incentives for investors to provide equity funds into low income areas. The article reveals that over $2 billion of federal tax subsidies have been allocated to gentrified projects for the wealthy, rather than the intended beneficiaries - low income residents in the urban core. The article proposes amendments to the applicable federal statute and regulations to close unintended loopholes. The article also asserts that subsidizing such projects such as multi-million dollar opera houses and hotel developments make for bad tax policy, as those developments most often are generated without knowledge or need for the incentive of the subsidy, and the trickle down economic theory upon which such subsidies rely have been unsuccessful in revitalizing the urban core.