GOP Lawmaker: Big Banks, Corporations Reap Millions Abusing Tax Credit Designed For Needy Communities
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GOP Lawmaker: Big Banks, Corporations Reap Millions Abusing Tax Credit Designed For Needy Communities

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Senator Tom Coburn (R-Okla.) released a report this ...

Senator Tom Coburn (R-Okla.) released a report this
week detailing how corporate interests and big banks
are abusing a tax incentive designed to empower poor
Americans.
During the Bill Clinton Administration, Republican
lawmakers created the New Markets Tax Credit to
provide incentive for banks to finance projects that
would create new markets in financially struggling
communities.

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GOP Lawmaker: Big Banks, Corporations Reap Millions Abusing Tax Credit Designed For Needy Communities GOP Lawmaker: Big Banks, Corporations Reap Millions Abusing Tax Credit Designed For Needy Communities Document Transcript

  • GOP Lawmaker: Big Banks, Corporations Reap Millions Abusing Tax Credit Designed For Needy Communities by Sam Rolley August 12, 2014 Senator Tom Coburn (R-Okla.) released a report this week detailing how corporate interests and big banks are abusing a tax incentive designed to empower poor Americans. During the Bill Clinton Administration, Republican lawmakers created the New Markets Tax Credit to provide incentive for banks to finance projects that would create new markets in financially struggling communities. But Coburn’s latest waste-illuminating report, “Banking on the Poor,” finds that the program is being used by big banks like Goldman Sachs, Wells Fargo and SunTrust, Hollywood and a number of corporations. “This tax credit intended to benefit the poor is instead lining the pockets of the well-off, such as big banks and other private investors that claim more than $1 billion in NMTC annually,” Coburn said. “Because it is funded by taxing the labor of Americans, NMTC is essentially 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.” NMTC works through a complicated process—but the crux of the scheme is incentivizing private investment in projects that will increase employment or provide beneficial services to the public by offering lavish tax subsidies to investors. According to Coburn, 40 percent of the current investments are made by banks. The report outlines how those financial institutions are cashing in on tax credits equaling 39 percent of NMTC investment for 7 years after scheming to maximize profits at taxpayer expense. From the report: Many banks have set up their own CDEs in order to receive tax credit allocations from the Treasury, making them both the recipient of the tax credits and the lender. Many of the top CDEs receiving tax credit allocations are subsidiaries of major banks including Bank of America, JP Morgan Chase, Wachovia (now Wells Fargo), and SunTrust banks (see Appendix I). From 2003 to 2013, Bank of America’s CDE was awarded $696 million in tax credit allocation authority, while $450 million went to Chase Bank, $488 million to Wachovia, and $428 million to Sun Trust. In the latest round of NMTC allocations alone, Chase announced it was awarded a $60 million allocation and Sun Trust was awarded a $43 million allocation.
  • Along with setting up their own CDE’s, banks invest in other CDE’s, which provide them with tax credits in return for an investment. Investors in the National Development Council, a CDE that has received $486 million in tax credit allocation authority include Citibank, Citizens Bank, Deutsche Bank, Dudley Ventures, JPMorgan Chase, Key Bank, PNC Bank, Sun Trust, Wells Fargo, and U.S. Bank Enterprise Community Partners, another CDE, has worked with U.S. Bank, Bank of America, JP Morgan Chase, and others on over 55 developments. “While Washington politicians tout the program’s goal is to put more money into the hands of businesses in struggling communities, the real beneficiaries are Wall Street banks, the CDE’s, and other large investment enterprises,” Coburn said. The lawmaker also outlined how NMTC funds are often used on frivolous projects in areas from Beverly Hills to the Hamptons, where the taxpayer-funded economic boost isn’t even needed. Coburn cites the Congressional Research Service in noting that the definition of qualified low-income communities qualifies “virtually all of the country’s census tracts [neighborhoods and communities]” to NMTC eligibility. The abuses of the NMTC funds listed in the budget hawk’s report include: • A financially-failing health center in Desert Hot Springs, California, complete with a $65,000 NMTC funded outdoor sculpture • A $13.5 million contribution leveraged using NMTCs for lighted water fountains in the Nation’s Capital • The city of St. Louis offered $10 million in financing through federal New Markets Tax Credits to a Fortune 500 company, Peabody Energy Corporation, to keep their business where it is, rather than move 10 miles outside of downtown St. Louis • $40 million in tax credits to help SunTrust and Wells Fargo invest in a dolphin show at the Atlanta aquarium. Coburn said that, in addition to underwhelming success at fulfilling its intended purpose, the NMTC duplicates other wasteful government programs at a cost of $6.5 billion to taxpayers each year— the report even provides examples of NMTC funding being used along with money from programs it duplicates. “When government picks winners and losers, the losers usually end up being taxpayers,” Coburn said. “Washington should reduce federal taxes on working Americans and all business owners who create jobs by eliminating tax earmarks, loopholes, and giveaways like the New Markets Tax Credit.”
  • How Does $619 Billion Just Go ‘Missing?’And, There Is ‘No Where’ To Cut Taxes? by: the Common Constitutionalist August 12 2014 What is the refrain of the left whenever anyone suggests tax cuts? Naturally it is, “How are you going to pay for them?” And what about cutting government spending? Well, Democrats will cry, in unison, that there is no where to cut. By cutting spending, we will be ripping food out of the mouths of needy children, or some such nonsense. Remember this statement – “There Is No Where to Cut“. And we can’t forget the “Tried and True”, tax cuts for millionaires and billionaires will only hurt the middle class. As a rather obvious aside: paying for tax cuts bugs the crap out of me. Why should we have to “pay” for a tax cut? It’s our money in the first place. But the government naturally treats our money as theirs first, and if there is anything left over, which they claim there never is, they will consider giving it back to us, the people. Anywho, speaking of whining about tax cuts, there’s this from just a few months ago. A column written by Steve Benen entitled, “The Magical Cost of Tax Cuts“. In it he describes a Republican plan to make between $156 billion and $310 billion of temporary tax cuts permanent. He writes: “How in the world does the GOP intend to pay for this? As it turns out, Republicans don’t even intend to try to pay for the tax breaks. Republicans want to make permanent hundreds of billions of dollars in business tax breaks, but they don’t want to find offsets to pay for any of the tax cuts.” (remember this also). He continues with the typical liberal diatribe of why not spend the money on extending unemployment benefits rather than tax breaks for business. The Republican priorities are screwed up – blah-blah-blah. So it appears to be common knowledge to both the political class and the intelligentsia that the government has no money to spare. So it was a surprise to see McPaper, USA Today, reporting on a rather startling discovery (not startling at all) by USASpending.gov that our government actually does “waste” money. The site was set up, intending to make federal spending more transparent. That’s a laugh. Well it sure did that – so transparent, it’s invisible. See, what the site disseminated is that the government was “missing at least $619 billion from 302 federal programs”. Yep, you read that right – $619 billion! And I’ll bet that number is low – way low. I bet 50% of government spending is either misused, wasted or just goes “missing”.
  • USA Today continues, saying that the government “data that does exist is wildly inaccurate, according to the Government Accountability Office, which looked at 2012 spending data. Only 2% to 7% of spending data on USASpending.gov is ‘fully consistent with agencies records’, according to the report.” Wait… What?! 2 to 7% is accurate?! So in other words, virtually all, about 95% of all government spending data is at the very least “inaccurate”. Want an example? Health and Human Services, HHS, failed to report $544 billion. How do you just not report a half a trillion dollars? Easy – because the government has become so large that it is literally unaccountable to the people. Want some more? USA Today writes that, “The Department of Interior did not report spending for 163 of its 265 assistance programs… The result: $5.3 billion in spending is missing…”, and for least 22% of all government contracts awarded, “the spending website literally doesn’t know where the money went.” Frankly, this is quite literally criminal – and I do mean criminal – like jail time criminal. I’ve always known that it was bad, but even I didn’t figure on this, and it is probably much worse than even this report portrays. In the past, I have proposed that every government department could easily cut its budget by 10%, no problem. Now with this information, I’m going to revise it to reflect the Harding/Coolidge model. Immediately cut the government by 50% – and that’s just a start!
  • Eric Holder Spends $14,000 In Public Funds To Fly His Kids Around In A Government Plane; Pays Only $1,000 In Reimbursement by Ben Bullard August 12, 2014 It’s completely legal for high-profile Federal officials to spend public funds to do private things, thanks to a convoluted system of rules governing spending and reimbursement for air travel expenses. Attorney General Eric Holder, for example, flew himself, his daughters, his daughters’ boyfriends and two guards to the Belmont Stakes in June – a trip that cost $14,440 in public funds. But since he is legally obligated only to pay the reimbursement equivalent of what that trip would have cost on a commercial air service, he repaid the government $955. On to the next trip. The Daily Caller, which recently obtained the record of Holder’s travel expenses under a Freedom of Information Act request, fills in the rest: Even for personal trips like this, the attorney general doesn’t fly commercial. For security reasons, Holder — like other top government officials — flies a government plane, though is required to reimburse taxpayers for airfare. That one day trip to Elmont, N.Y. on June 7, according to records provided to TheDC by the Department of Justice, ended up costing the government $14,440. But Holder only had to reimburse the government $955 for flying him and four passengers to the final leg of the Triple Crown horse races that day. That’s because he only has to pay the equivalent cost of a coach commercial airline ticket for each non-law enforcement passenger — not the total cost to charter the plane. Neither Holder nor other Obama officials is unique in taking advantage of the perks of government air travel. Look for examples of how President George W. Bush used Air Force One for fundraising travel, and you will find them. Democrat or Republican, the ethics at play indicate a systemic incentive for Federal officials to take personal trips – with all the protections their power demands – that they otherwise might forego if they had to jostle with the business-class hoi polloi…while paying market rate for the privilege. INFOWARS.COM BECAUSE THERE'S A WAR ON FOR YOUR MIND