Revitalizing Our Urban Core without Marginalizing Our Core People: Closing Tax Credit Loopholes for the Wealthy while Generating Ethnic Entrepreneurial Self Help Alternatives to Subsidized Gentrification
This article provides the most comprehensive analysis to date of the New Markets Tax Credits program established by Congress. The purpose of the NMTCs 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 that have been allocated to gentrified projects for the wealthy, rather than the intended beneficiaries – low income residents in the urban core – as Congress intended. The article proposes amendments to the statute and regulations to close unintended loopholes.
The article also creates a model for a substrata of the African American middle class (termed “Ethnivestors”) who are likely to have the requisite investment motivations to step up to the challenge of investing in the urban core as a matter of collective personal responsibility/self help. This model incorporates lessons of prior ethnic enclaves in America. Neoclassical and contemporary principles of law and economics are also infused into the analysis.
Banking and Finance Law | Civil Rights and Discrimination | Economics | Land Use Law | Law and Economics | Taxation-Federal | Tax Law
Date of this Version
Roger M. Groves, "Revitalizing Our Urban Core without Marginalizing Our Core People: Closing Tax Credit Loopholes for the Wealthy while Generating Ethnic Entrepreneurial Self Help Alternatives to Subsidized Gentrification" (August 24, 2006). bepress Legal Series. bepress Legal Series.Working Paper 1621.