Tax credit’s impact on community investment deserves praise
In his May 7 opinion piece, “The great tax credit giveaway,” Charles Chieppo argues that the Commonwealth’s tax credit programs are a bad deal for taxpayers. This is not necessarily so.
The Community Investment Tax Credit, which provides a 50 percent tax credit for donations to certified community development corporations in Massachusetts, was the first tax credit adopted by the Legislature in 2012 after the Tax Expenditure Commission’s recommendations were issued. It follows that group’s recommendations closely: This tax credit is competitive, capped, transparent, and includes a sunset in 2019 when the Legislature can evaluate its results and determine whether it should continue.
The result? In 2014, 1,100 donors invested $4.8 million to organizations that are working to improve economic opportunities for low- and middle-income residents through programs that have a track record of success, and the cost to the state was just $1 for every $2 invested.
The bottom line is that tax credits, when properly designed, can be a valuable tool to leverage private investment for the public good.