Bill Text: NJ AR220 | 2016-2017 | Regular Session | Introduced
Bill Title: Urges federal government to continue tax exemption for municipal bond interest.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2017-12-04 - Reported out of Assembly Committee, 2nd Reading [AR220 Detail]
Download: New_Jersey-2016-AR220-Introduced.html
Sponsored by:
Assemblyman TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Urges federal government to continue tax exemption for municipal bond interest.
CURRENT VERSION OF TEXT
As introduced.
An Assembly Resolution urging the federal government to continue the tax exemption for municipal bond interest.
Whereas, The State of New Jersey and its 565 municipalities undertake many capital improvements for the benefit of the public by financing the cost of improvement projects through the issuance of bonds and notes, the interest on which is exempt from federal income taxation; and
Whereas, The federal income tax exemption for municipal bond interest has been in effect since the inception of the federal income tax in 1913, and remains essential in permitting states and local governments to affordably and effectively carry out their responsibilities to their citizens; and
Whereas, In 2010, the National Commission on Fiscal Responsibility and Reform (the "Simpson-Bowles Commission") recommended that interest on newly issued state and municipal bonds be subject to federal income taxation; and
Whereas, the President and Congress of the United States are purportedly considering a massive tax overhaul scheme, including changes to individual and corporate income tax policy, which could threaten to diminish the appeal of municipal bond purchases for income-seeking investors; and
Whereas, Municipal bond sales are of vital importance to municipalities throughout the State as this funding mechanism allows for the development of infrastructure and other projects necessary to secure the long-term prosperity and security of State residents at reasonable borrowing rates; and
Whereas, the President and Congress of the United States are considering legislation that would eliminate or severely restrict the ability of States and their political subdivisions to issue tax exempt bonds, even though the effect of such action would be to raise the cost of the necessary services provided by the State to residents, including disadvantaged and middle-class families; now, therefore,
Be It Resolved by the General Assembly of the State of New Jersey:
1. This House urges the President and Congress of the United States to continue the federal income tax exemption for municipal bond interest.
2. Copies of this
resolution, as filed with the Secretary of State, shall be transmitted by the
Clerk of the General Assembly to the President of the United States, the
Majority Leader of the United States Senate, the Speaker of the United States House
of Representatives, and each member of Congress from the State of New Jersey.
STATEMENT
This resolution urges Congress and the President to continue the exemption of municipal bond interest for federal income tax purposes.
The State of New Jersey and its 565 municipalities undertake many capital improvements for the benefit of the public by financing the cost of improvement projects through the issuance of bonds and notes, the interest on which is exempt from federal income taxation. The federal tax exemption for municipal bond interest has been in effect since the inception of the federal income tax in 1913 and remains essential in permitting states and local governments to affordably and effectively carry out their responsibilities to their residents. In 2010, the National Commission on Fiscal Responsibility and Reform (the "Simpson-Bowles Commission") recommended that interest on newly issued state and municipal bonds be subject to federal income taxation. Congress and President Trump are purportedly considering a massive tax overhaul scheme, including changes to individual and corporate income tax policy, which could threaten to diminish the appeal of municipal bond purchases for income-seeking investors
The proposed tax changes could eliminate or severely restrict the ability of states and their political subdivisions to issue tax exempt bonds, even though the effect of such action would be to raise the cost of the necessary services provided by the State to residents, including disadvantaged and middle-class families.
