Senate Approves Budget Resolution, Including Tax Preference Cap LanguageIn the early morning hours of March 23, 2013, the Senate approved its fiscal 2014 budget resolution (S Con Res 8) by a vote of 50-49. While the resolution is non-binding, it does set the chamber’s spending guidelines for the coming fiscal year because it is not signed into law by the president. The resolution is significant because it directs the Senate Finance Committee to prepare legislation that would increase revenue by $975 billion over 10 years. Non-binding language included in the resolution endorses eliminating some tax breaks for corporations and upper-income taxpayers to achieve this revenue target and suggests the possibility of including a cap on deductions for both tax-exempt and tax credit bonds. The proposal notes that “this could take the form of a limit on the rate at which itemized deductions and certain other tax preferences can reduce one’s tax liability, a limit on the value of tax preferences based on a certain percentage of a taxpayer’s income, or a specific dollar cap on the amount of allowable deductions.” Concerned with the prospect of such provisions being included the resolution, the GFOA, along with the National League of Cities, National Association of Counties and others, sent a letter to the House and Senate Budget Committees, urging their support for preserving the tax exemption on municipal bond interest. The GFOA’s Federal Liaison Center will continue to meet with the Senate Budget and Finance Committees to advocate on this issue.
Get Engaged – Help Protect the Muni Tax ExemptionThe GFOA continues to urge our members to work with your elected officials and engage your members of Congress and Senators on this issue. To assist you in this effort our FLC has developed a draft letter, a draft resolution, and talking points for our members to use in urging their congressional delegations and Senators to maintain the exemption. Please forward any letters you send to your congressional leaders and Senators on this issue to Dustin McDonald, director of the GFOA’s Federal Liaison Center.
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