Repeal Tax Exemption for Municipal Bonds

Overview The proposal would repeal for future years the exemption for interest on state and local bonds. While the exemption is supposed to help state and local borrowers, only a fraction of the federal cost of the exemption is captured by the borrowers. What is captured, in the form of lower interest paid, does harm by inducing public ownership of projects that should not be undertaken. For outstanding bonds, the…
Andrews & Kurth Centennial Professor of Law, University of Texas at Austin - School of Law, USA
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