There's another thread on the board right now regarding Whole Foods. And from time to time people bring up stadium financing. Both of these projects [[and many others, I should add) have been possible because of the use of tax credits.

Now first things first the reason for this post is not about the fairness or unfairness of tax credits. I recognize that many people think that they are fair. I recognize that many people think that they are unfair. I humbly request that the discussion about the justice/injustice of tax credits be pushed to another conversation.

My goal in this post is that people on both sides of the debate [[and myself included) are actually informed about what tax credits are andhow they actually do and do not work.

For example, it's commonly said that __________ project is receiving _________ million dollars in tax credits...and how the _______ million dollars could have been better spent somewhere else. I hear this and I just want to punch my fist through a window.

My understanding of tax credits -- and someone please tell me if I'm wrong -- is that when someone receives a tax credit, they are essentially receive discounts on future taxes that will be owed.

In other words, if you received $100,000 in tax credits, no one hands you a check for $100,000 that you get to spend. It's the equivalent of me agreeing to give you a shoebox full of receipts from CVS every year for 10 years, each with 1000 coupons that say "Save $10 on your next purchase of $50 or more."

Now obviously, my analogy is not 100% airtight. And getting a bunch of IOUs in a briefcase is still better than not getting the briefcase at all. And certainly you can argue that it's unfair that ______________ project is getting the coupons while __________ project is not getting the coupons.

But what is not accurate is to say that that $100,000 in tax credits over the next 20 years is the same as me handing you $100,000 in cash next week.

That said, I would like to hear informed voices explain the mechanics of the tax credits as well as any misunderstandings I may have or any commonly held misconceptions about them.

I'm not trying to defend the use of tax credits. I just want to a make sure that we all actually understand how they work.