A Congressional Research Service analysis found that although several recent fiscal reform plans contain proposals that would modify the tax treatment of state and local government bonds, the “direction of broader tax reform will likely dictate which modifications, if any are made” to such debt instruments.

The 22-page report published last week detailed how and why state and local governments issue debt and described the purpose of a variety of municipal bonds such as private-activity bonds, refunding bonds, arbitrage bonds and tax-credit bonds.

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