WASHINGTON — The highly anticipated Joint Committee on Taxation tax reform report recommends repealing tax exemption for municipal bonds as one option for overhauling the tax code.
The 568-page “Report to the House Committee on Ways and Means on Present Law and Suggestions for Reform Submitted to the Tax Reform Working Groups” released Monday summarizes various suggestions and comments received for each tax reform working group topic area.
On February 13, Ways and Means Committee chairman Rep. Dave Camp, R-Mich., and ranking member Rep. Sandy Levin, D-Mich., created 11 tax reform working groups that reviewed current tax law in its designated areas, researched relevant issues and compiled feedback from stakeholders.
“The release of today’s report reflects the hard work of Members and staff,” Camp and Levin said in a joint statement. ”This document provides an important and comprehensive overview of the tax code, an overview of some of the most commonly referenced previous tax reform proposals and summarizes the views of more than 1,300 submissions offered to the Ways and Means Committee by key stakeholders. The Committee will dig into its details over the coming weeks.”
The JCT report provides an overview of the Internal Revenue Code as in effect for 2013 and provides a more detailed description of the tax code’s provisions relevant to the topic area of each working group. It comes two days before the 11 working groups, each with a Republican chair and a Democratic vice-chair, will present their findings to the full committee.
While completely repealing the tax exemption for muni bonds is suggested, retaining all of the present-law rules for tax-exempt bonds is also listed. A Hill source noted that the summary of all the comments received are not recommendations, suggestions or support from the JCT or the working groups.
The comments also suggest rejecting proposals that would convert tax-exempt bonds into tax credit or direct-pay tax credit bonds, the report found.
In general, outside groups suggested expanding and/or permanently extending Qualified Zone Academy Bonds, New Clean Renewable Energy Bonds and Build America Bonds.
The groups also received comments to retain the present-law rules for tax-exempt financing for non-profit hospitals and repealing the alternative minimum tax preference for interest on tax-exempt bonds.