Departing Sen. Tom Coburn has attacked big banks for claiming hundreds of millions of dollars in tax credits intended for poor communities.
The governmental waste watchdog released a report Monday revealing that the New Markets Tax Credit was meant to encourage banks to fund low-income community projects, according to The Washington Times.
But Coburn says in the report that banks are instead using the credit, enacted by a Republican Congress and signed by then-President Bill Clinton, for such projects as luxury hotels and drive-in movie theaters.
"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," wrote Coburn, who is battling prostate cancer and is stepping down after the midterm elections, two years before his term ends.
"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 payouts to big banks and corporations in the hope that those it took the money from might benefit."
The Oklahoma Republican singled out such projects as the $18 million in tax credits that helped Chobani, a popular Greek yogurt company, buy new machinery to keep up with demand, as well as an ethanol company that got $20 million in investment due to the tax credit, then filed for bankruptcy three years later.
Coburn said that Wells Fargo and SunTrust banks received $40 million in credits to help invest in a dolphin tank at the world’s largest aquarium, in Atlanta. The aquarium charges $65 a ticket while the surrounding area has condominiums selling for $1 million each.
"Clearly, this project did not need federal financial assistance and is unlikely to have any noticeable benefit for lower-income Americans, who likely cannot even afford to take in the dolphin encounter," Coburn said, according to the Times.
Although the credit ended last year, several lawmakers are want it renewed as part of a package of special tax breaks dubbed "tax extenders" on Capitol Hill, the Times said.
Coburn is urging Congress to reject the tax credit, a move he says would save taxpayers $1 billion a year.
"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," he said.
However, Reps. Michael Turner, an Ohio Republican, and Chaka Fattah, a Pennsylvania Democrat, said the credit has created 500,000 jobs since it was passed in 2000, the Times reported.
"We want to make certain this piece of outstanding congressional business does not fall victim to the end-of-the-year gridlock," the lawmakers said.
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