Public Power's Position
The American Public Power Association (APPA) believes that tax-exempt municipal bonds are the single most effective tool for financing investments in public infrastructure, including the generation, transmission, and distribution infrastructure used to serve public power utility customers.
Imposing a tax on municipal bond interest would, in effect, impose a federal tax on the investments needed to build three-quarters of the nation’s infrastructure: investments that make commerce possible and communities livable.
APPA believes that the federal tax exclusion for municipal bond interest should be strengthened through commonsense reforms, including:
- Reinstating the ability to issue tax-exempt advance refunding bonds;
- Simplifying municipal bond private-use rules; and
- Increasing the current small-issuer exception limit from $10 million to $30 million.
Tax-exempt municipal bonds are an incredibly efficient financing tool, reducing state and local borrowing costs by $824 billion over the next decade alone.
Municipal bonds finance nearly 75 percent of the nation’s core infrastructure: the investments that make our communities livable and commerce possible.
Tax-exempt municipal bonds are a well understood, well regulated, and dependable financial investment, with nearly 60 percent of tax-exempt bond interest earned by individuals going to those age 65 and older.
Priorities:
- Oppose any attempt to tax municipal bond interest.
- Oppose any attempt to limit current uses of municipal bonds.
