Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

Tax Reform and Pension Reform
ALEC ^ | 3-13-14 | Ben Wilterdink

Posted on 03/13/2014 2:08:57 PM PDT by ThethoughtsofGreg

Congressman Dave Camp’s recently released tax reform draft has stimulated a much-needed national conversation about the U.S. tax code, attracting praise, criticism and skepticism. Buried in the plan is one tax change that could significantly influence the pension reform debate now raging nationwide at the state and local level.

Camp’s plan would require top earners to pay a surtax on previously untaxed municipal (muni) bond interest. Currently, state and local governments use tax-exempt muni bonds to fund capital projects such as bridges and new school buildings. The proposed surtax might negatively affect top bracket taxpayers’ willingness to invest in muni bonds.

Overall, eliminating this tax preference might be good tax policy. But in the near-term, the surtax will squeeze already tight municipal budgets. Adding a surtax to muni-bond interest—which effectively increases the cost of issuing muni bonds—could force state and local governments to choose whether to fund pensions or capital projects. Governments should act quickly to reform the greatest existing threat to their budgets: unfunded pension liabilities.

(Excerpt) Read more at americanlegislator.org ...


TOPICS: Business/Economy
KEYWORDS: pensions; taxes; unions

1 posted on 03/13/2014 2:08:57 PM PDT by ThethoughtsofGreg
[ Post Reply | Private Reply | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson