Between 2000 and 2014, the tax-exempt status of municipal debt saved state and local municipalities an estimated $714 billion, or $80-$120 in additional interest expense per $1,000 borrowed.
This estimate was developed on the behalf of the International City/County Management Association (ICMA) and the Government Finance Officers Association (GFOA) by researchers at the University of Washington Evans School of Public Policy.
The debate about the efficacy of the tax-exempt income status on municipal bonds has a long history, and continues unabated.
Congress is discussing the issue today as part of a larger tax reform initiative. Much of the benefit of municipal bonds is derived from their income tax advantage, and without it the municipal market and existing bondholders could be materially impacted. The whitepaper argues that at the moment there is no robust alternative to the existing system of tax-exempt bond financing. Alternatives such as PAYGO financing and public private partnerships have niche applications, but cannot broadly replace the existing system.
For the time being, the income tax exemption on municipal bonds looks well protected.
Beware of the Energy Vampires
When Financial Goals Aren’t Enough!
Finding Senior Care on Limited Budgets
What Is a Key Employee and Why Are They So Critical?
Listening to Understand Is to Stand Under
What Support Looks Like in Leadership
Don’t Make Your Financial Content Buzzkill
Legacy Vendors Are a Bigger Issue Than Legacy Systems
Are You Aware of These Nine Risks to Your Portfolio?
Catching People Doing What’s Right Along the Customer Experience Journey
Learn12 hours ago
A Surprising Post-Election Investment Idea
Development12 hours ago
The Extraordinary Power of the First 90 Days
Digital Strategy12 hours ago
FINRA and Compliance In The Era of Fake News
Building Smarter Portfolios1 day ago
Beware the “Known-Unknowns”
Learn1 day ago
Cybersecurity Without The Commitment
Development2 days ago
How Freedom Resulted in $300mm to $800mm in Just 8 Years
Insights3 days ago
How to Start Your Journey to Be Different
Advisor3 days ago
11 Ways the New Tax Law Could Help or Hurt Your Tax Return