Observers of the municipal bond market are questioning President Barack Obama's plan to cap at 28% the tax exemption for municipal bond interest, even though it is unlikely to be put into action this year. "Taxing municipal bonds is counter-productive to the goal of economic growth, as the tax could raise capital costs for state and local governments and discourage investment in job-creating infrastructure projects," said Michael Decker, SIFMA's managing director and co-head of municipal securities. Read SIFMA's statement on Obama's fiscal 2015 budget proposal.

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