Tax

Rep. Chris Van Hollen, the ranking minority member of the House Budget Committee, has updated the Democrats' sequester replacement bill so that it would replace mandated across-the-board cuts for fiscal 2014 with a mix of proposals to cut spending and raise revenue, including implementation of the so-called Buffett Rule.

While municipal bond market participants oppose President Obama's proposal to limit the value of tax-expenditures, including the muni bond interest exclusion, to 28%, Republican proposals would be even harsher, the Center on Budget and Policy Priorities said in a recent paper.

States have moved beyond the recession-driven liquidity crisis but there are sources of ongoing weaknesses such as unfunded pensions that make states unable to rely on economic growth alone to mitigate risks of default and future structural budget stability, Morgan Stanley concludes in a report.

A group of conservative grass roots organizations sent a letter to lawmakers urging them to pass the Marketplace Fairness Act online sales tax bill in order to "close a tax loophole that punishes small businesses."

Treasury Secretary Jacob Lew urged Congress to act swiftly on raising the debt ceiling saying it was necessary to preserve the nation's credit rating and citing uncertainty over how long the U.S. will be able to continue to pay its bills.

The municipal bond market may benefit from the shake-up at the Internal Revenue Service as the newly named acting commissioner Daniel Werfel has close ties with state and local governments and is viewed by market groups as a strong ally.

The National Governors Association published a report Thursday summarizing governors priorities as outlined in their annual state of the state addresses in 48 states and two territories.

Beginning Friday, the Treasury Department will suspend the sales of State and Local Government Series securities until further notice, the first maneuver to avoid hitting the federal debt ceiling.

Miami-Dade County is worried about its swaps going south if Congress tinkers with the tax exemption on municipal bonds. The county had swaps covering $953 million of bonds as of September 2012.

The Senate Finance Committee released the sixth in a series of tax reform discussion papers Wednesday on economic and community development that included a proposal to repeal all governmental and private activity municipal bonds and replace tax-exempt bonds with direct-pay and tax-credit bonds.

The Treasury Department has made no decision about whether to continue or halt sales of State and Local Government Series Securities when the suspension of the debt ceiling expires on May 19, but in either case would honor any subscriptions received before that date, an official said.

Former Internal Revenue Service official Nancy Lashnits will take over as chair of the Committee on tax-exempt financing with the American Bar Association.

Sen. Pat Roberts, R-Kan., expressed concern that when comprehensive tax reform occurs, it should be carefully structured so that existing industries and investments are not harmed such as on municipal bonds. He also opposed the proposed 28% cap on itemized deductions including tax exemption.

President Obama's former top tax official Michael Mundaca said that raising the government's statutory borrowing authority could be key in determining how the White House and Congress proceed on tax reform.

The two lead tax-writing lawmakers have teamed up and launched a campaign seeking the public's input for a simpler tax code.

Hawaii State legislators killed a bill that would have reduced the state's take of a surcharge designated to pay the costs of a $5.2 billion elevated rail now under construction in Honolulu, according to the Honolulu Star Advertiser.

Unexpectedly strong income tax revenues are outpacing the growth in sales taxes receipts during the tepid economic recovery differing from previous recoveries when the opposite was true, according to a Standard & Poor's report.

Despite a recent 37% surge in federal non-withheld income tax revenues, a new Rockefeller Institute study warns that the tax data may be deceiving and not equate to a rapidly recovering economy.

Approximately 3% of all state and local government spending is used to fund public pension benefits, a small increase from previous reports, according to a new study from the National Association of State Retirement Administrators.

Speaking at the Peterson Foundation fiscal summit Tuesday, House Budget Committee chairman Rep. Paul Ryan, R-Wis., said that the House will push forward on tax reform regardless if the Senate follows or not.