Tax Cuts Curbed Muni Sales. Trump's Latest Plan Would Boost Them
- Private activity bonds expanded in draft infrastructure plan
- Proposal would allow advance refundings on the bonds
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Last month, Congress rolled back the ability of state and local governments to issue municipal bonds as a way to cover the cost of corporate tax cuts. Now, President Donald Trump is seeking to boost such borrowing to rebuild America’s infrastructure.
A draft outline of Trump’s proposal leaked to the press Monday calls for expanding the use of tax-exempt bonds to finance roads, sewers, airports and other public works built by businesses. It would lift state volume caps on issuance of such private activity bonds, eliminate restrictions on their use for transportation and encourage their sale by ports. It also would expand the ability to advance refinance the securities, creating potential savings that could be used for reinvestment.