New Markets Tax Credits program benefits taxpayers

A report issued by a coalition of community development organizations and financial institutions details how the New Markets Tax Credit program has spurred private investment in economically distressed communities to create over 500,000 jobs, generate over $5.3 billion in federal income tax revenue and over $3 billion in state and local taxes – an amount which more than covers the cost of the program as measured in terms of revenue lost by the federal government – and revitalize communities across the country. The program is currently awaiting Congressional renewal.

New Report on Economic Impact of Federal Tax Credit Program Demonstrates Significant Return on Investment to Taxpayers

26 Dec 2012 - New Markets Tax Credit Coalition

New Markets Tax Credit (NMTC) Economic Impact Report Finds that NMTC Has Generated A Significant Number of Jobs, Expanded State and Local Tax Base in Economically Distressed Areas

Excerpt:

NMTC Economic Impact Report

WASHINGTON, D.C.– A report issued today by a coalition of community development organizations and financial institutions details how an expired federal tax credit, awaiting congressional action, has spurred private investment in economically distressed communities to create over 500,000 jobs, generate over $5.3 billion in federal income tax revenue and over $3 billion in state and local taxes – an amount which more than covers the cost of the program as measured in terms of revenue lost by the federal government – and revitalize communities across the country.

"While there is ample data on the New Markets Tax Credit's (NMTC) track record of delivering capital to our most challenged communities, there was very little research on the economic impact of the NMTC in terms of jobs created and tax revenue generated, until now," explained New Markets Tax Credit Coalition Board of Directors Chairman and TELACU Senior Vice President Jose Villalobos.

The newly released New Markets Tax Credit Economic Impact Report is the first to measure the aggregate economic impact of NMTC investments over the course of the program. The Report also examines the extent to which the federal tax revenue generated by individuals and businesses benefiting from New Markets Tax Credit investing offsets the cost of the program to the federal government.

The Report highlights four key findings:

  • NMTC investments between 2003 and 2010 are responsible for creating over 500,000 jobs in economically distressed communities across America;
  • These investments also generated over $5.3 billion in federal tax revenue and over $3 billion in state and local taxes;
  • The federal tax revenue generated by NMTC investments more than covers the cost of the program as measured in terms of revenue lost by the federal government.
  • Through 2010, NMTC investments directly generated over 124,000 operational (permanent) jobs. In 2010 alone, NMTC investments in operational activities generated almost $1.1 billion in federal tax revenue, easily offsetting the estimated $720 million cost of the program for the federal government and providing a 50 percent return on investment.
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> Read the full article.

> Download the full New Markets Tax Credit Economic Impact Report (PDF, 114 KB)

> Visit the New Markets Support Company website.

Article Type: News