We examine the impact of the Tax Cuts and Jobs Act’s (TCJA, also known as the “Trump tax cuts”) cap on the state and local tax (SALT) deduction on the relationship between municipal bond spreads and real estate tax revenues by examining California counties’ financial and municipal bond...

This paper considers ways in which federal tax policy affects municipal asset and debt holdings. The tax treatment of municipal bonds and income creates an arbitrage opportunity for communities to issue tax exempt debt and invest in financial assets. I present evidence that suggests the rules in...

The current system of tax-exempt bond financing is inefficient and inequitable because a large portion of the federal subsidy provided by the tax exemption does not reach state and local governments and accrues instead to the wealthiest investors. In addition, the current system excludes large...