Updated Data Brief Highlights the Importance of the Tax-Exemption for Municipal Bonds
States and local governments are responsible for more than 90 percent of all public-sector construction spending, most of which is funded through tax-exempt municipal bonds. Unlike Federal Treasury bonds, which can support deficit spending, tax-exempt municipal bonds are subject to strict limitations under the Internal Revenue Code and state constitutions. As a result, they are predominantly used to fund new infrastructure projects such as roads, bridges, schools, and essential utilities like water, sewer, and power systems.
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