The Dormant Commerce Clause and the Balkanization of the Municipal Bond Market (with Technical Appendix)

AEI's working paper series

Abstract

This report argues that the selective municipal bond exemption challenged in Davis functions as an import tariff in the municipal bond market by favoring within-state holdings of municipal bonds over interstate holdings. Observation confirms that the selective exemption has balkanized the municipal bond market and harmed investors. The recognized exceptions to the dormant commerce clause of the Constitution should not be extended to uphold the selective exemption.

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Alan D. Viard is a resident scholar at AEI.

About the Author

 

Alan D.
Viard
  • Alan Viard was a senior economist at the Federal Reserve Bank of Dallas and an assistant professor of economics at Ohio State University prior to joining AEI. He has also worked for the Treasury Department's Office of Tax Analysis, the White House's Council of Economic Advisers, and the Joint Committee on Taxation of the U.S. Congress. Mr. Viard is a frequent contributor to AEI's Tax Policy Outlook, AEI's On the Margin column in Tax Notes, and AEI's Marginal Impact column in State Tax Notes. In January 2010, he was named by Tax Notes as a nominee for 2009 Tax Person of the Year.
  • Phone: 202-419-5202
    Email: aviard@aei.org
  • Assistant Info

    Name: Chad Hill
    Phone: 202-862-5862
    Email: chad.hill@aei.org
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