A Proposal for the Elimination of the Exclusion for State Bond Interest

70 Pages Posted: 20 Apr 2007  

Kevin Yamamoto

South Texas College of Law Houston

Abstract

A Proposal for the Elimination of the Exclusion for State Bond Interest suggests a novel replacement to § 103 of the Internal Revenue Code that eliminates the inefficiencies and inequities currently created by that provision. Section 103 functions primarily as a federal subsidy to state and local governments by allowing taxpayers to exclude from gross income the interest received from certain state bonds. This article asserts that § 103 should be reformed and proposes a "Credit-Equity" plan to replace the state subsidy currently provided by § 103. It also examines § 103's history, function, and prior proposals for its repeal or change.

Suggested Citation

Yamamoto, Kevin, A Proposal for the Elimination of the Exclusion for State Bond Interest. Florida Law Review, Vol. 50, p. 145, 1998. Available at SSRN: https://ssrn.com/abstract=981069

Kevin Yamamoto (Contact Author)

South Texas College of Law Houston ( email )

1303 San Jacinto Street
Houston, TX 77002
United States

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