NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Municipal Bond Subsidy Rates



Municipal Bond Subsidy Rate
Year   (1)
Tax-Exempt
Interest
(2)
Plan X
Revenue 
(3)
Plan Y
Revenue 
(4)
Subsidy Rate
((3)-(2))/(1)
(5)
Ignoring AMT
1988  32.80 409.15 420.91 0.36 0.36
1989  37.23 427.95 441.39 0.36 0.36
1990  40.01 442.63 457.01 0.36 0.36
1991  43.76 443.04 459.26 0.37 0.37
1992  45.67 469.83 486.64 0.37 0.37
1993  46.40 496.60 515.57 0.41 0.41
1994  48.29 521.35 541.10 0.41 0.41
1995  48.50 570.65 590.80 0.42 0.42
1996  47.91 632.05 652.45 0.43 0.43
1997  48.99 703.49 724.41 0.43 0.43
1998  51.35 750.92 772.97 0.43 0.43
1999  53.31 836.98 859.98 0.43 0.44
2000  54.78 948.22 971.79 0.43 0.44
2001  56.63 812.12 835.55 0.41 0.42
2002  55.20 750.79 772.86 0.40 0.40
2003  53.79 690.95 710.03 0.35 0.35
2004  52.64 773.66 792.33 0.35 0.35
2005  57.28 871.71 892.37 0.36 0.36
2006  73.48 943.88 970.76 0.37 0.37
2007  78.43 1038.80 1067.85 0.37 0.37
2008  80.42 961.23 989.80 0.36 0.35
2009  72.43 753.42 778.97 0.35 0.35
2010  73.48 842.06 868.14 0.36 0.35

Amounts in billions of nominal dollars after refundable credits.
Static revenue effect of taxing municipal bond interest at regular rates under the US Individual Income Tax assuming the taxable yield is 1.29 times tax-free yield.
Ignoring cross deductibility of state income tax.

Source: https://www.nber.org/taxsim/municipal-bond-subsidy-rate
25 August 2016
 
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