Wealthy investors and major banks have been making windfall profits by using a little-known federal tax break to finance new charter-school construction.
The program, the New Markets Tax Credit, is so lucrative that a lender who uses it can almost double his money in seven years.
Under the New Markets program, a bank or private equity firm that lends money to a nonprofit to build a charter school can receive a 39% federal tax credit over seven years.
By combining the various credits with the interest from the loan itself, a lender can almost double his investment over the seven-year period.
No wonder JPMorgan Chase announced this week it was creating a new $325 million pool to invest in charter schools and take advantage of the New Markets Tax Credit.
So glad all that bailout money is going to a good cause. While winkling away houses of their parents, banks will be getting into the school real estate biz, you know, for kids. If you can demonize teachers and bring in TFA as short-timers to erase organized pressure against these tactics, why, you've got yourself quite the little scheme going there.