The APIC program's aim is to close this gap by providing investors with a safer way to invest in companies that will provide quality jobs and economic development in low-income areas. A CDE could be almost any kind of investment fund, like a small business investment corporation or a community development institution. In turn, CDE investors would receive a 25 percent tax credit on their investments in economic development projects in low-income areas. Unlike the APIC program, which provides business incentives only to larger companies or to joint ventures involving larger companies, CDEs receiving the tax credit could invest in businesses or community development projects of any size. While the New Markets Initiative has received support from both parties and some grassroots constituencies, other advocates say the proposal's benefits fail to surpass its drawbacks, pointing to the more fundamental question of who can be trusted with the responsibility of alleviating poverty.
Large corporations are kind of the culprits.
Some advocates worry that tax incentives are not enough to get businesses to go into communities they historically have avoided. They would rather see more employment-based economic initiatives, ones that require the money to pass through fewer levels before real improvements are seen on the ground. Another concern is that most of the New Market Initiative proposals financially benefit businesses while all but ignoring the non-profit groups who have longer track records of fighting poverty. Because the New Markets Initiative is a product of the Clinton administration, some advocates worry that Democrats will support it because, while it is not the most effective method of improving low-income communities, it is one of only a handful of plans on the table. Xavier Briggs, an assistant professor of public policy at Harvard University's John F. Kennedy School of Government and a consultant to HUD, said he believes the New Market Initiative can stand up to the criticism.