Obama Targets Muni Bond Tax Exemption, State Unemployment Loans
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President Barack Obama’s plan to cut the budget deficit repeats his call for curbing the tax exemption on municipal bonds and would give states a break on unemployment debts owed the federal government.
The recommendation includes tax overhauls proposed last week that would limit exemptions for interest on state and local government bonds for those earning $200,000 or more. While that may push up municipal borrowing costs, Obama today proposed giving states that have run out of money for unemployment benefits two more years of interest-free loans.