Released in February, the 2016 budget set forth by the Obama administration takes a focused stance towards the country’s growing infrastructure requirements. The 2016 budget features tax-exempt bond proposals seen in the administration’s 2014 and 2015 budgets, and introduces four new bond proposals:
1) A New Category of Qualified Private Activity Bonds for Infrastructure Projects – Qualified Public Infrastructure Bonds
2) Modifications to Qualified Private Activity Bonds for Public Educational Facilities
3) Modified Treatment of Banks Investing in Tax-Exempt Bonds
4) Repealing Tax-Exempt Bond Financing of Professional Sports Facilities
The 2016 budget also encourages the financing of infrastructure by limiting tax rates for upper-income taxpayers who can use specific tax deductions, tax preferences, and interest on tax-exempt to reduce tax liability to a 28 percent maximum. The new 28 percent cap, though viewed by opponents as discouraging to the investment of tax-exempt bonds, reflects the administration’s position for broader reforms on tax expenditures.
A detailed look at the 2016 budget’s four new bond proposals and the 28 percent cap is available, along with insights into other pertinent bond proposals.