Late last week, Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch circulated a letter to fellow Senators on their proposed “blank slate” plan, essentially a tax reform proposal that would start over with a "blank slate" by eliminating all tax breaks and lowering tax rates for both individuals and corporations alike. In doing so, so the draft “blank slate” proposal would eliminate the exclusion for municipal bond interest.
Chairman Baucus and Ranking Member Hatch have asked Senators to submit proposals to them on what provisions they would like to see added to this draft tax code, so Senators would have to convince Chairman Baucus and Ranking Member Hatch to add the municipal bond exclusion (or any other exclusion or deduction) back. If this or any other proposal to eliminate the exemption for municipal bonds is enacted, it would significantly drive up state and local borrowing costs for infrastructure projects. A recent report shows that if this exemption had been fully eliminated, in the past decade it would have cost local governments $495 billion and stalled essential infrastructure projects.
Take a few minutes to reach out to your Senators and encourage them to urge the retention of the current law for exclusion of municipal bond interest.
Comments