POLITICS/TAXES: “State and local governments could suffer hits to revenue collections under the tax reform bills being considered in the U.S. Senate and House because of the potential loss of a federal subsidy applied to bond issues and because a proposed increase in the standard taypayer deductions would affect some states.
These additional risks to state and local governments are coming to light as lawmakers and experts sift through the bills before the two chambers.
State and local governments have already been grappling with the potential revenue-raising risks of provisions in the two bills that would eliminate or cap taxpayer deductions of state and local income, sales and property taxes from their federal tax bills.
Analysts on Wednesday [11-15-17] said that the U.S. House of Representatives bill, which was unveiled Nov. 2, could knock out a federal subsidy applied to billions of dollars of bonds sold by states and local governments in the aftermath of the Great Recession.
The threat to the subsidy was disclosed in correspondence this week between the Congressional Budget Office and Representative Steny Hoyer, a Democrat who was seeking more details about the effects of the House tax bill.”
-Karen Pierog and Laila Kearney, “U.S. tax reform poses more risks for state and local governments,” Reuters, Nov. 15, 2017 03:14pm