Paul L. Caron

Friday, February 29, 2008

Jackson on The New Markets Tax Credit Program

Janet Thompson Jackson (Washburn) has published Can Free Enterprise Cure Urban Ills?: Lost Opportunities for Business Development in Urban, Low-Income Communities Through the New Markets Tax Credit Program, 37 U. Mem. L. Rev. 659 (2007).  Here is the Conclusion:

At one time, African-American urban communities contained thriving business districts. Operating in the protected markets of a segregated society, black entrepreneurs played a major role in building an economic foundation for their communities. Decades later, the protected markets and the businesses are gone. Instead, many low-income urban communities are filled with abandoned businesses, vacant lots, and dilapidated housing. Often, the only active enterprises are liquor stores, check-cashing businesses, fastfood eateries, and open drug markets. Of the shops that exist in low-income areas, many are not owned by those who live in, or have ties to, the community. Not surprisingly, few private investors have expressed an interest in business development in these areas.

The New Markets Program has played a significant role in the rebirth of distressed areas by tapping the incentives of tax credits to spur investment in these long-neglected communities. To fully realize the promise of this economic development tool, however, a significant proportion of the investment dollars should be targeted to minority-owned businesses. History indicates that absent intentional measures to direct investment to low-income urban minority businesses, these enterprises and their communities will continue to be excluded from the prosperity enjoyed by mainstream society.

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