New Report Demonstrates Federal Tax Credit Program's Ability to Stimulate Economic Development, Create Jobs in Low Income Communities 2013 Progress Report Provides Evidence on Effectiveness of the Credit as a Tool for Driving Capital to Areas of Economic Distress
WASHINGTON, June 5, 2013 /PRNewswire/ -- A report issued today by the New Markets Tax Credit Coalition details how the New Markets Tax Credit (NMTC) transformed private sector capital into patient, flexible capital for credit-starved businesses in low income communities across the country.
"The NMTC has a long track record in creating jobs and encouraging economic growth in our country's most distressed neighborhoods and communities," said Jose Villalobos, President of the NMTC Coalition. "Our latest Progress Report shows that the Credit made significant contributions to our economic recovery last year."
In 2012 alone, the NMTC was responsible for the direct creation of almost 50,000 jobs in economically distressed urban and rural communities across the country, according to the report – representing an impressive two percent of the 1.8 million jobs created in America last year. The 2013 NMTC Progress Report provides insight into how the NMTC was used in 2012, including the types of projects it helped financed and the areas where these projects occurred.
Unlike previous NMTC Progress Reports, the 2013 Progress Report contains a Special Report on the NMTC and Tax Reform, calling on Congress to permanently extend the NMTC as part of their efforts to reform the tax code.
"As the lead Democratic sponsor in the House for many years, I am a strong supporter of the NMTC program because of its proven results. This successful initiative has stimulated investment and economic growth in low income communities that are traditionally overlooked by conventional capital markets," said Congressman Richard E. Neal (D-MA-1), who is slated to speak at a breakfast briefing on the Progress Report release. "More than $55 billion has financed revitalization projects across the country and created thousands of jobs. As a result, I believe this important bipartisan program should be extended and made permanent."
The NMTC attracts capital to low income communities by providing private investors with a modest federal tax credit of 39 percent for investments made in businesses or economic development projects in census tracts where the individual poverty rate is at least 20 percent, or where median family income does not exceed 80 percent of the area median.
SOURCE New Markets Tax Credit Coalition