The supreme court yesterday seemed set to uphold states' rights to tax the muni-bonds of other states while exempting their own bonds from taxation. The AP
reports that Chief Justice John Roberts
said that "this is an area where Congress can regulate," and then added that Congress has never taken steps to prevent states from giving preference to their own bonds. According to ICI
data, 230 mutual funds with $210 billion in assets invest in municipal bonds nationwide. The case, filed in 2003 by a Kentucky couple, claims that a state taxing another state's bonds while exempting its own is unconstitutional.
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