Portfolio Substitution and the Revenue Cost of Exempting State and Local Government Interest Payments from Federal Income Tax

James M. Poterba, Arturo Ramirez Verdugo

NBER Working Paper No. 14439
Issued in October 2008

---- Acknowledgements -----

We are grateful to participants in the NBER Tax Expenditure Project, especially William Gentry, Roger Gordon, and Eric Toder, for helpful comments, and to the National Science Foundation (Poterba) for research support. Pablo Villanueva and Jose Cabrera provided outstanding research assistance. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.

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