MBFA’s Reaction to Administration Budget Proposal Impact on Municipal Bonds
WASHINGTON – March 4, 2014 – The Municipal Bonds for America Coalition (MBFA) is disappointed in the proposal within the Administration budget that, as in prior budgets, caps tax exempt interest on municipal bonds at 28%. Steve Benjamin, Mayor of Columbia, South Carolina and Chair of the Coalition’s executive committee, said, “It is disappointing that both ends of Pennsylvania Avenue continue to
float proposals, such as the 28% limit on the tax exemption for municipal bonds or a surtax, that would gut our nation’s primary tool for financing core infrastructure. The tax exemption for municipal bonds is a sacred trust for local governments and investors that dates to the creation of the income tax.”
Mayor Benjamin also described specific impacts from the proposal. “State and local governments pay for three-quarters of our nation’s investments, much of it financed with bonds. Without the exemption, municipalities and their taxpayers would face significantly higher costs for financing core infrastructure. All Americans benefit from the core infrastructure financed by tax-exempt bonds. They are critical to public health, safety, the environment, and commerce. They build schools in our communities, bridges in our cities and ports that support American manufacturing jobs. They keep our roads safe and our citizen’s water bills low. In this era of constrained federal budgets and diminishing federal grants, I urge the Administration and Congress to reconsider these ill-conceived proposals that would limit our ability to borrow at affordable rates and invest in America’s future competitiveness.”
MBFA, which unites state and local government officials with municipal market professionals to ensure preservation of the municipal bond tax exemption, continues to meet with lawmakers and the Administration to press their opposition to proposals that undercut the tax exemption for municipal bonds.
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Municipal Bonds for America