19690902 r-69-20 R-69-20
RESOLUTION URGING RECIPROCITY OF TAX IMMUNITY BE-
TWEEN FEDERAL AND MUNICIPAL BONDS AND SECURITIES
WHEREAS, the exemption of municipal bond interest from
federal income taxation is critically important in enabling the
cities to discharge their mounting burden of responsibility at the
lowest possible cost; and
WHEREAS, suggestion has been made that indirect federal
taxation of municipal bond interest be sanctioned by disallowance
of a prorated portion of otherwise allowable expense deductions of
investors who receive part of their income from municipal bond in-
terest; and
WHEREAS, by Revised Statutes (Section 3701) Congress has
expressly prohibited such indirect taxation of federal bond inter-
est by the states and cities; and
WHEREAS, the exemption of public securities--federal ob-
ligations from state and local taxes and state and local obligations
from federal taxes--has traditionally been and of right ought to be
reciprocal;
NOW, THEREFORE BE IT RESOLVED by the City of Fairfax,
Virginia, that the Congress of the Unites States is urgently peti-
tioned to reject all measures allowing direct or indirect taxation
of municipal bonds.
Adopted: September 2, 1969.
Attest:
Cit~ Clerk