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    What are the arguments for and against the critisim of the federal income tax exemption of interest on state-local debt as being an inefficient subsidy because there is no national interest in capital projects being financed by borrowing rather than by current revenues?

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    https://brainmass.com/economics/business-cycles/18090

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    Hello,

    An arguement for criticism of tax-exempt being inefficient in this case is that the national government cannot control local capital investment if those funds are raised by local borrowing and not by federal government tax transfers. Local governments (and their citizens deciding by referendums) can decide what ...

    Solution Summary

    Arguments for and against the critisim of the federal income tax exemption of interest on state-local debt are presented.

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