WASHINGTON — Congress should eliminate the tax exemption for municipal bonds, Sen. Tom Coburn said in a report released on Tuesday.

"There is little economic reason to encourage state and local governments to issue debt rather than spend their money in other ways," the Republican from Oklahoma said in his "Tax Decoder" report. "Further, state and local governments would likely be better off in the long-term with lower, simpler tax rates on citizens and businesses than with higher rates and a federal tax subsidy for their debt."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.