A tax credit that is supposed to help poverty-stricken communities is instead being used to finance at least two luxury hotels, an antique car museum, a small theater in an upscale neighborhood, and other dubious projects, while lining the pockets of wealthy banks and investors.
The New Markets Tax Credit, introduced during the Clinton administration, was intended to spur the development of projects that would create jobs in low-income communities. However, recent reports by Bloomberg Markets Magazine and CBS News have cast a harsh light on how banks and investors have managed to manipulate the qualifications for the tax credit to allow projects to be built in areas that would seem to hardly fit the definition of a low-income community.
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