If we’re going to give a tax break to billionaires so they can buy more private jets, we should also give a tax break to businesses in cities trying to breathe new life into hard-up neighborhoods.
Is that too much to ask?
It’s called the “new markets tax credit” and it has been a crucial financing tool for many welcome neighborhood developments in Chicago, as well as in cities across the country. Yet the GOP’s overhaul of our nation’s tax code would allow it to expire in 2019. That’s better than the House version, which would have scrapped it entirely, but it is not good enough.
We have detailed the many ways this tax code plan, written by the Republican majorities that control the U.S. House and Senate, is a bum deal for Illinois, Chicago and working people. It rewards the wealthiest Americans before anybody else and leaves the poorest Americans worse off. But somehow this little doozy — the elimination of a tax credit tailor-made to assist communities in distress — almost got by us.
Makes us wonder what other ticking bombs are buried in a bill.
In Chicago, the new markets tax credit was used to bring a Whole Foods to Englewood. It was an important part of the financing for a new medical trauma center on the South Side. It made possible the construction of the $6.5 million Metrosquash squash facility in Woodlawn.
In all, Crain’s Chicago Business reports, the tax credit pulls in about $200 million a year for Chicago, financing 123 projects with a combined cost of $1.6 billion since 2001. That included a $20 million credit for a Back of the Yards distribution facility for Testa Produce — a true jobs-creator that the company’s president says would not have been built otherwise.
The tax credits are designed to spur community redevelopment by giving businesses a tax break instead of an outright federal grant, as had been done prior to the Clinton administration. Republicans loved it.
Now the tax credit conflicts with the GOP’s more pressing goal of cutting taxes for the rich without entirely exploding the federal deficit.
A strong voice for maintaining the tax credit has been Republican Rep. Adam Kinzinger of Illinois. Back in November, he urged his colleagues to make the credit permanent and — though he voted for the House version of the tax code overhaul — he has continued to work to save it.
Mayor Rahm Emanuel also has pushed for the program’s survival.
“Developments made possible by new markets tax credits create jobs, a sense of community and safe spaces for young people,” he told us in an email. “Republicans in Washington should be strengthening this program, not scrapping it.”
The new markets tax credit is about as bipartisan a concept as you will find. It should be made permanent, not permanently threatened with extinction.
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