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Taxation

MBFA Warns of Impacts From 28% Cap

JAN 25, 2013 4:43pm ET

The Municipal Bonds for America coalition warned Friday that a retroactively applied 28% cap on the value of tax exemption would fundamentally alter 100 years of precedent, raise borrowing costs for issuers, limit infrastructure development and constrain economic development, while doing little to help solve the nation's fiscal crisis.

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Comments (3)
If a cap were enacted would the terms 'tax-exempt' and
'tax-free' still be allowed for use in marketing or fund name desriptions?
Posted by John H | Saturday, January 26 2013 at 1:09PM ET
Correction: that was supposed to be 'descriptions'.
Posted by John H | Saturday, January 26 2013 at 1:11PM ET
I dont' think Obama understands the muni-bond market at all. If he wants to create jobs and improve infrastructure, why would he even consider taxing infrastructure projects at all? Moreover, if the federal government starts taxing munis, even with a "cap" why would anyone want to invest in them unless yields were comparable to private sector bonds. Since local bonds carry risk they historically were not associated as having, I can foresee some dramatic increases in what the market will demand to support governmental projects.
Posted by Tim E | Sunday, January 27 2013 at 7:29PM ET
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New York's budget leaves it at risk of becoming one of only five states that do not allow the use of design-build procurement to deliver public infrastructure projects.

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