President Obama’s 2016 budget poised to address infrastructure needs

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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.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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