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Congress urged to maintain tax exemption on municipal bond interest

July 29, 2013

As the Senate Finance Committee works on tax reform legislation, a broad coalition of 54 organizations, including the AHA, last week urged Senate leaders to maintain the federal tax exemption on municipal bond interest. “As the federal government continues to develop policies to reduce the deficit, several proposals have been offered that would replace, limit or eliminate the tax exempt status of municipal bonds,” the groups wrote. “…Just as federal borrowing has been exempt from state and local taxes for over a century, the municipal tax exemption has a long history of success, having been maintained through two world wars and the Great Depression, as well as the recent Great Recession, and it continues to finance the majority of our nation’s infrastructure needs for state and local governments of all sizes when no other source exists to do so. We cannot afford to abandon the great success of this important instrument now.”