- The Washington Times - Monday, August 11, 2014

ANALYSIS/OPINION:

Tom Coburn is on a tear again. As the No. 1 waste watcher on Capitol Hill, he has let loose a scorcher.

In a new report, the Oklahoma Republican pointed out how a tax credit intended for the poor can go terribly wrong.

For certain, it’s the examples that my colleague Stephen Dinan spelled out in his news story Tuesday that make you want to holler but not throw up both your hands.


Heard of Chobani yogurt? Well, Mr. Dinan reported, it received $18 million in tax credits to buy new equipment to keep up with the rapidly growing demand for its product. (More details below.)

An ethanol company got $20 million in investment thanks to the tax credit, then filed for bankruptcy three years later.

Also, $40 million in tax credits went to Wells Fargo and SunTrust banks to help invest in a dolphin tank at the world-renowned aquarium in Atlanta, Mr. Coburn pointed out. Tickets are $65 to see the dolphins, and the head veterinarian made $363,035 in 2010. Meanwhile, the area is hardly the type of downtrodden place the credit was designed for — local condominiums go for $1 million, the senator’s report said.

A wellness center now threatens to “bankrupt an entire [California] city” as officials struggle to keep it afloat, slashing public workers’ salaries and even pondering cutting the city police department, Mr. Coburn said.

The culprit is the New Markets Tax Credit (NMTC), and it was signed into law by President Clinton after being passed by a Republican Congress. The credit is up renewal and again has bipartisan support.

The NMTC was intended to benefit the poor and he communities they live in. But instead, Mr. Coburn said, it is “lining the pockets of the well-off, such as big banks and other private investors that claim more than $1 billion in NMTC annually.”

“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,” Mr. Coburn said.

Who knew back in Mr. Clinton’s day that the loopholes would swallow up the poor and that Americans’ pockets would be picked?

Probably politicians on both sides of the aisle, but let’s move forward.

The NMTC shouldn’t be renewed without substantial rewrite to close the loops and the holes.

The bureaucratic boneheads could have utilized Google maps about the aquarium and not merely taken investors’ claims at face value.

Story Continues →