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President Obama's jobs bill has a retroactive tax on municipal bonds...

Discussion in 'Political Discussion' started by Patsfanin Philly, Oct 10, 2011.

  1. Patsfanin Philly

    Patsfanin Philly Rookie

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    #95 Jersey

    Jobs bill hurts bonds: President Obama's jobs bill would hurt the sale of municipal bonds - Hartford Courant


    >>>>>Whether you believe President Barack Obama's jobs bill will work or you don't, one thing seems certain: The American Jobs Act of 2011 will drive up the cost for state and local governments borrowing money for capital projects, including the construction of new schools, roads and other infrastructure work.

    The jobs bill that President Obama recently sent to Congress includes a proposal to limit the value of all itemized deductions to 28 percent for all taxpayers in the highest tax brackets (those taxpayers with an adjusted gross income of $250,000 or more for married couples filing jointly, or $200,000 for single taxpayers). Income from municipal bonds is included in this proposal.<<<<<<<
  2. The Brandon Five

    The Brandon Five Rookie

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    #75 Jersey

    That should really help the towns and cities out given the current state of their finances.

    The U.S.A. was a great idea while it lasted...
  3. chicowalker

    chicowalker Rookie

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    Where is the retroactive part?

    A retroactive tax on munis and ending munis' tax exemption are 2 different things. (I don't think retroactive taxes should ever be permitted.)

    Having munis be tax exempt is similar to many other exemptions -- there's a valid argument for them, but they are one more complication to the tax code. If you're for munis being tax exempt, that's perfectly reasonable, but just keep it in mind if you also want the tax code simplified -- magnified by most exemptions somebody else wants and thinks is justified.
    Last edited: Oct 10, 2011
  4. Patsfanin Philly

    Patsfanin Philly Rookie

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    #95 Jersey

    >>>Additionally, the proposal would affect previously purchased tax-exempt bonds — creating a retroactive tax increase. This would add to investor uncertainty.>>>>

    When you purchase them, they are promised to be triple tax-free ( fed state and local) for the life of the bond so you take a lower return knowing it will even out post-tax. If you now take away the triple tax free feature after it was purchased by someone acting on " detrimental reliance", it is retroactive.
  5. chicowalker

    chicowalker Rookie

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    thanks, I missed that.

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