Speaking at the Bond Dealers of America’s 2012
“Everything is very politically-driven and motivated. It is going to make it very difficult for
Debates among lawmakers that used to take place privately are now increasing made public. Marshall said details about tax discussions in the
“It’s hard to talk amongst each other and really reach an agreement,” she said.
Information and misinformation will quickly reach constituents, she suggested.
“The prospect of getting hundreds of thousands of emails and phone calls and postcards from your constituents … is not something that a lot of members of
While Obama has advocated re-establishing the Build America Bond program with lower subsidy rates, he has also proposed a 28% cap on the value of tax-exempt interest for wealthier taxpayers.
Romney has said he plans to close tax loopholes and eliminate certain tax preferences, but has not provided details. However, his critics think he cannot lower tax rates across the board by 20% and lower the federal deficit without making drastic cuts in tax expenditures.
Other threats include deficit reduction commission proposals to eliminate tax exemption for all or certain new muni bonds, and pending legislation that would make all new muni bonds taxable, tax-credit bonds.
Another speaker at the conference on Friday,
The federal government may be more divided after the election because moderate members of
He also doubts lawmakers will consider the muni-bond tax exemption to be a “loophole.”
“When [politicians] say, ‘We have to close some of these loopholes,’ they are talking about carried interest or accelerated depreciation,” Miller explained. Tax exemption for muni bonds, which help finance infrastructure, is a “whole different category and should not be called a loophole,” he said.
Still, speakers said the muni community must carefully monitor the tax debate.
“In the grand scheme of things, everyone should consider themselves at risk right now,” said Marshall. “Every tax credit and tax exemption will be under examination.
Regulations affecting the municipal market, including the Volcker Rule, also dominated the discussions Friday.
BDA senior vice president of government relations
Committee chairman Rep.
BDA and other market participants have advocated for municipal bonds to be exempt from the Volcker Rule.
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