Reprinted with permission from Tax Notes, January 22, 2018

For generations, municipalities have leveraged their authority to issue tax-exempt debt to encourage private investments in public goods. In so doing, state and local governments can revitalize communities with private money, thus avoiding the bloated public balance sheets that led to Detroit's 2013 bankruptcy and Puerto Rico's effective bankruptcy last year. Last month's near termination of the $102 billion annual market for tax-exempt private activity bonds (PABs) (more than 20 percent of the U.S. tax-exempt bond market), before Republicans restored the break 10 days before the zero hour, fundamentally undermined the stability of a market that depends on stability for its value. Read more.


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