Proposals on municipal bonds could have 'significant adverse impacts' on water, power, CFA tells Congress
Originally published March 11, 2013
Be careful in evaluating proposals changing the tax treatment of municipal bonds, the Consumer Federation of America urged members of Congress late last week.
"As Congress considers proposals related to tax treatment of municipal bond interest, the Consumer Federation of America (CFA) urges it to seriously assess the implications for consumers," the consumer group said in a March 8 letter to leaders of the House and Senate. "Some of the proposals being considered could well have significant adverse impacts on key consumer services provided by local governments, such as power and water. For that reason, the more than 250 non-profit consumer groups that belong to CFA support the resolution: 'The federal tax exemption for state and local bonds should be retained for clearly public purposes.'"
"We are particularly concerned that the costs and benefits of altering the tax treatment of municipal bonds have not received sufficient public discussion and debate," CFA said. "In the 112th Congress, the House Ways and Means Committee held not a single hearing on this subject. And while the Senate Finance Committee did hold such a hearing, it did not invite a single witness representing state and local governments, or local taxpayers and ratepayers, to testify."
CFA's members have approved a resolution calling for "a thorough public assessment of intended and unintended consequences of public policies that devalue these tax exemptions," the consumer organization said. "We urge you and your committee to help ensure that such a public assessment takes place."
The letter went to Max Baucus, D-Mont., chairman and Orrin Hatch, R-Utah, ranking Republican of the Senate Finance Committee; and to David Camp, R-Mich., chairman and Sander Levin, D-Mich., ranking Democrat of the House Ways and Means Committee.
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