Tax reform

The U.S. Congress is considering eliminating the federal tax exemption for municipal bonds, the single most important financing tool for cities and towns across America. If they do, the cost of building and maintaining infrastructure — roads, bridges, schools, water systems, and even broadband networks — will skyrocket.

Senate GOP leaders also aim to make the TCJA tax cuts permanent, which would raise the costs of tax reform unless a new scoring method is adopted.

The Bond Buyer's Caitlin Devitt and Kyle Glazier discuss the outlook for tax and infrastructure legislation.

Municipal market advocates plan to use the data to support the case to Congress for preserving the tax exemption.

As Republicans hash out their promised tax package, the debate over the bill's scoring method carries implications for tax-exempt municipal bonds.

The tax exemption appears to be in realistic danger as House Republicans seek to offset the cost of extending the Trump tax cuts.

Unfortunately, a vocal minority believes eliminating the longstanding tax exemption on local, state, and municipal bonds is one way to pay for extending tax cuts.

OMB director nominee Russell Vought said he supports allowing the president to redirect funding away from state and local governments, bypassing the congressional appropriations process.

The finally approved continuing resolution steers around the debate to raise the debt ceiling while funding repairs to the toll-supported Key Bridge in Baltimore, reimbursing DC for inauguration costs and transferring the RFK stadium site.

The future of key policies and upcoming budget battle tactics are taking shape based on several leadership changes and announcements in recent days.