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    federal tax exemption of interest on state-local debt

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    Why is it argued that the federal income tax exemption of interest on state-local debt is an escape from progressivity for the rich? Please explain the arguements for and against this critisism.

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    https://brainmass.com/business/interest-rates/federal-tax-exemption-interest-state-local-debt-18091

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    Hello,

    I think the question is asking that since most tax-exempt bond holders are rich, using this method to encourage local and state government investing in capital ...

    Solution Summary

    federal income tax exemption of interest on state-local debt/bonds

    $2.19

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