The Republican tax plan being considered in Congress would eliminate a tax exemption on some types of bonds issued by state and local governments to refinance their old debt, the Wall Street Journal reported. The GOP proposal targets the exemption for so-called advanced refunding bonds, which allow governments to refinance old bonds earlier to take advantage of low interest rates and, occasionally, to postpone upcoming debt payments. The House approved its version of the tax measure last week, and the GOP has said that it aims to get agreement on the bill by year’s end. It is one of several municipal-market exemptions that could be phased out under the legislation. The nonpartisan Joint Committee on Taxation estimates that ending advance refundings would mean an additional $17.3 billion in revenue to the federal government over the next decade.
