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Medientyp:
E-Book
Titel:
More Private Equity, Less Government Subsidy, and More Tax Efficiency in Urban Revitalization
:
Modeling Profitable Philanthropy and Investment Incentives
Erschienen in:FSU College of Law, Law, Business & Economics Paper Forthcoming
Umfang:
1 Online-Ressource (43 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.1452870
Identifikator:
Entstehung:
Hochschulschrift:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments August 14, 2009 erstellt
Beschreibung:
In hopes of revitalizing depressed urban areas, US tax policy has been to use tax credits as a major incentive to induce private equity re-investment. But those give away subsidies to private investors have failed to have transformative effects, and come at a price in the billions to the public treasury. This article seeks a shift in the tax policy paradigm to increase the private equity investment, while reducing tax subsidy dependence. For the philanthropic urban investor, the short term incentive of an annual tax benefit (credits from the annual tax returns) is singularly inadequate to cause a major shift in equity investments for the urban core. A preferred method of increasing that investor's participation is to increase the return on investments through joint ventures with tax exempt entities. As a catalyst for increasing that investment return, Congress should transform favorable, but non-precedential private letter rulings into statutory laws that strengthen the legal authority for joint ventures between private equity investors and tax exempt entities - a process this article terms 'statutorization'. This broadened base of private equity investors accelerates the timing and volume of projects that over the long term reduce both direct subsidies to the low income residents and the indirect subsidies to the investor-creators of those projects