As the respective chairmen of the congressional tax committees met on Monday at the site of the Baldinger Bakery project, realized under the New Markets Tax Credits program ("Tax credit gives rise to success stories," Opinion Exchange, July 8), they might well have reflected on that program as a tax expenditure that is possibly ripe for eradication. Basically, New Markets appears to allow a way to "invest" in solid development projects and reap a tax credit for doing it. The projects, in effect, get government-subsidized interest on their loans, and investors get lower taxes.
Baldinger Bakery is a wonderful business that provides employment and satisfies consumer demand for a wholesome product. It couldn't find financing and needed subsidization in 2010 because some of those same "investors" likely helped drive the economy into a tailspin, freezing up regular credit that Baldinger otherwise might have used for its new building.
How did a 125-year-old family business qualify as a "new" market? Sen. Max Baucus and Rep. Dave Camp should look hard at programs such as New Markets Tax Credit. There are hundreds of them.
