Rep. John F. Tierney has introduced tax reform legislation that would require all tax-exempt municipal bonds to be issued as direct-pay subsidy bonds at a 28% subsidy rate after this year. The bill is part of an effort to eliminate certain tax expenditures and sway the deficit-reduction negotiations driving the legislative agenda.

Tierney, a Democrat in his eighth term representing Massachusetts’ northeast district, has had a tax reform proposal in the works since April. Initially, he proposed to require all new munis be direct-pay bonds with a 25% subsidy rate.

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