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Changes in leadership in the House and Senate tax-writing committees are on the horizon. President Obama intends to nominate Senate Finance Committee Chairman Max Baucus, D-Mont. to become ambassador to China.
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Representative Dave Camp, a Republican from Michigan and chairman of the House Ways and Means Committee, speaks at the Wall Street Journal CFO Network conference in Washington, D.C., U.S., on Tuesday, June 21, 2011. Camp said he’s trying to shape a proposal for overhauling the U.S. tax code that Congress could advance this year or in 2012. Photographer: Joshua Roberts/Bloomberg *** Local Caption *** Dave Camp
House Ways and Means Committee chairman Dave Camp, R-Mich., will be in his last year of his term as chair in 2014 and is unlikely to receive a waiver from term limits to continue to hold the job. Rep. Paul Ryan, R-Wis., has expressed an interest in replacing Camp. (Image: Bloomberg News)
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Senator Ron Wyden, a Democrat from Oregon, listens to testimony during a Senate Finance Committee hearing in Washington, D.C., U.S., on Wednesday, July 27, 2011. The income tax rate cut sought by U.S. corporations will be difficult to achieve even if targeted tax breaks are eliminated, Committee Chairman Max Baucus said today. Photographer: Joshua Roberts/Bloomberg *** Local Caption *** Ron Wyden
Baucus's likely successor as Senate Finance Committee chairman — Sen. Ron Wyden, D-Ore. — is a major supporter of tax reform. But he has scared the muni market by introducing bills that would change the exemption for interest on municipal bonds to a traditional tax credit. (Image: Bloomberg News)
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Congress is set to take up its third government funding continuing resolution so far this fiscal year. New infrastructure funds need a full FY22 budget in order to begin to flow to states.
Municipal bond market participants generally expect to see some activity on tax reform in 2014, but they do not think that comprehensive tax reform will be enacted during the year. (Image: Bloomberg News)
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Matt Fabian, managing director and senior analyst for Municipal Markets Advisors, speaks during the Bloomberg Link Insurance Portfolio Strategies conference in New York, U.S., on Wednesday, March 2, 2011. Insurers, which held about $23 trillion in assets globally at the end of 2009, are facing pressure on their investment results as low interest rates hurt returns and as planned new rules for the industry make equity and real-estate investments less attractive. Photographer: Stephen Yang/Bloomberg *** Local Caption *** Matt Fabian
"Politicians will talk endlessly about the need for tax reform, but actually approving it means assigning winners and losers while working together with sworn partisan enemies," said Matt Fabian, managing director for Municipal Market Advisors. "That is not something easily done ahead of yet another contentious election cycle." (Image: Bloomberg News)
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Michael Decker, Securities Industry and Financial Markets Association's managing director and co-head of municipal securities, said that it would be hard for Camp to achieve his objective of lowering the top rate to 25% while keeping tax reform revenue and distributionally neutral without cutting back on tax preferences, including the exemption for municipal bond interest. "I think this just has to be a factor," he said. "The math doesn't work otherwise."
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U.S. President Barack Obama makes a statement in the East Room of the White House in Washington, D.C., U.S., on Thursday, June 28, 2012. The U.S. Supreme Court upheld the core of President Barack Obama's health-care overhaul, giving him an election-year triumph and preserving most of a law that would expand insurance to millions of people and transform an industry that makes up 18 percent of the nation's economy. Photographer: Luke Sharrett/Pool via Bloomberg *** Local Caption *** Barack Obama
Most market participants think President Obama will continue to include a 28% cap on the value of the tax-exemption for munis in his fiscal 2015 budget, which is supposed to be released in February. They also expect the president to once again propose America Fast Forward bonds, direct-pay bonds that could be used to finance a range of projects, including those eligible for private-activity bond financing. (Image: Bloomberg News)
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Jacob "Jack" Lew, U.S. treasury secretary, talks prior to a Bloomberg Television interview in Washington, D.C., U.S., on Friday, May 17, 2013. Lew said this week the Internal Revenue Service (IRS) needs "new leadership" to restore public confidence in its work after a scandal over the agency's selective screening of nonprofit groups. Photographer: Andrew Harrer/Bloomberg *** Local Caption *** Jack Lew
Legislation passed in October suspended the debt ceiling through Feb. 7. The Treasury can once again engage in extraordinary measures so that the United States can continue to pay its obligations in the short-term. Treasury Secretary Jack Lew told Congress in Dec. 19 letter that by using extraordinary measures, the department could extend the nation's borrowing authority until late February or early March. (Image: Bloomberg News)
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