Adoption of these sections would entail the serious jeopardizing of a bond market which funds some $15 billion in public improvements each year, in exchange for an illusory $45 million gross tax revenue to the Treasury annually, which actually amounts to a substantial net loss after deductions.

Adoption of these provisions would be infeasible, inequitable and, would not be tax reform.

Respectfully submitted

Detroit-Wayne County Port Commission

F. Clifton Lind

FCL:ap

Port Director

Senate Finance Committee,

2227 New Senate Office Building,
Washington, D. C.

Gentlemen:

We should like at this time to express our total opposition to any plan whereby the Federal Government infringes on the right of localities to issue tax exempt securities. This taxexempt market provides us with an effective and advantageous vehicle for the financing of public capital projects and regard this financial independence as a significantly important feature of our federal system of government.

Investors in tax-exempt securities bought them in the belief that the income would never
be taxed by the federal government. Once this principle is breached, there is theoretically
no limit to the extent to which succeeding congresses could go. More than any other sector
of the security markets, these bonds are based on the good faith of government at all
levels. Any change in the tax status would not only result in higher initial interest cost,
but irreparably damage investor confidence with far reaching effects on the cost of future
local financing.

Federal tax exemption is not a gift to certain investors but really a concession made to
the investor who accepts a lower rate of return than he could get in alternative investments.
In a very real sense, the investor in tax exempt securities has already paid his income
tax and done so in advance.

Presently, Milwaukee County is at the statutory limit for interest payments. Additionally, our property taxes are well beyond the reasonable limit of public endurance. We are now at the point of curtailing such things as parks, welfare and hospital programs. An additional burden of increased financing costs would force an even greater sacrifice in a time of impending urban crisis.

The County Board, by resolution and other actions, has fully endorsed this position.

STATEMENT

In Behalf of

DALLAS-FORT WORTH REGIONAL AIRPORT BOARD

re H.R. 13270- Proposed Taxation of Interest on Municipal Bonds

Submitted to the Committee on Finance
United States Senate

September 23, 1969

MCCALL, PARKHURST &
HORTON,

E. RAY HUTCHISON

Attorneys at Law

1400 Mercantile Bank Bldg. Dallas, Texas 75201