WASHINGTON — The tax-exemption for the interest paid on all municipal bonds will cost the federal government an estimated $38.7 billion in fiscal 2011, according to President Obama’s proposed budget for that fiscal year, which begins Oct. 1.

The $38.7 billion represents a 37.76% increase from the $28.1 billion of revenue losses projected from tax-exempt interest for this fiscal year and is 2.46% higher than the $37.78 billion of losses that had been projected for fiscal 2011 by the fiscal 2010 budget released last May.

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.