ABSTRACT
Tax-exempt municipal financing benefits individuals, communities, and the nation by supporting education, commerce, transportation, health, justice, and many other public services that facilitate the economic growth and development of the United States and the well-being of its citizens. Municipal bonds are sold by cities, counties, towns, states, and other governmental units to raise funds to provide basic public services to their citizens. The Anthony Commission on Public Finance was created by Representative Beryl F. Anthony Jr. of Arkansas to consider the effect of the current federal tax law on the ability of state and local governments to carry out their responsibilities to their citizens. The two broad general categories of tax-exempt bonds in the commission's proposal are public-purpose bonds and private-activity bonds. The proposed subcategories of public-purpose bonds are, governmental bonds, public-activity bonds, and exempt-purpose bonds. Since 1917, the tax code has contained provisions encouraging banks and other financial institutions to purchase the debt of state and local governments.
