The Securities Industry and Financial Markets Association urged a House Ways and Means Committee tax reform working group to leave municipal bonds alone, warning that tax credit bonds would not be an effective alternative.

"The value of families' savings would be eroded significantly if Congress retroactively imposed a full or partial tax on municipal interest," SIFMA said in a 38-page white paper that covered other tax issues as well. "The tax exemption is better than direct subsidies for infrastructure investment because bonds must be repaid, forcing a market test of the project's viability."

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.