Calls Grow for Elimination of Tax-Exemption in TCJA Revamp
The Municipal Bonds for America coalition continues to lay the groundwork for a proactive advocacy effort to promote and protect munis as chatter in DC on proposals to extend the Tax Cuts and Jobs Act pick up steam.
This week, the Committee for a Responsible Federal Budget, a non-paritisan DC based think-tank, hosted an event on the Tax Cuts and Jobs Act expiration, and ways to extend the package in a budget neutral manor.
As part of the offset proposals, the elimination of the tax-exemption was discussed as part of an “aggressive” option.
This follows a policy paper from the conservative American Enterprise Institute, that called for an elimination of the tax-exemption for all bonds, claiming it is an inefficient financing mechanism for state and local governments.
While the authors noted this more aggressive approach is politically unlikely, it is alarming that multiple policy institutes have singled out the tax-exemption as a pay-for this week.
It should be noted the authors also listed further restrictions on the state and local tax deduction, a full repeal of the AMT, and elimination the home mortgage deduction, instead utilize a 10% nonrefundable credit–all politically challenging changes.
