Capital Gives said on Tuesday it is exiting the American Funds Capital Gaining Tax Credit program, saying it is concerned about a possible loss of federal funding for programs that provide financial literacy to Americans.
Capital Gives is a tax credit program that helps small and midsized companies reduce their taxable income by as much as 20 percent.
The program is funded through the Internal Revenue Service and the Department of Labor.
The program was created in 2005 to encourage businesses to invest in the United States, a priority for President Donald Trump.
The tax credit has long been controversial because it rewards companies for holding assets in the U.S. and is based on the tax rate on the company’s profits.
The IRS estimates that in 2017, more than 3.5 million businesses received the credit, which is paid to companies that hold capital assets overseas.
Critics of the program, which are called the capital gains tax credit, say it is a form of tax avoidance and has been used by the wealthy to avoid taxes on capital gains earned overseas.
Capital Gains, however, argues the program is essential for U.s. businesses to grow and hire and to provide access to capital.