Bid to End Tax-Exemption Stirs Up Bond Summit

The Bond Buyer reports:

A bipartisan effort is under way to eliminate the tax exemption on municipal bonds, attorney Rosemary Becchi, a partner at Patton Boggs LLC, said at The Bond Buyer’s Third National Municipal Bond Summit here Thursday.

“I think it is a very real problem,” she warned.

In addition to tax exemption, other tax reform measures under consideration could have “large consequences for state and local governments,” said Georgetown University Law Center professor John Buckley.

Some of those include proposals that would eliminate the deduction of state and local taxes and mortgage interest from federal taxes, which would drive up costs for taxpayers and make it harder for local governments to increase property taxes to support their budgets, he said.

State and local issuers should be involved now in the debate over federal tax reform even though the passage of the measures affecting the municipal bond market could be two or three years away, the experts said.

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