Word: tax-exempt
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Banks last week charged government bond dealers as much as 10% a year for loans to finance their holdings of securities. Interest rates on tax-exempt local bonds reached new peaks. Cobb County, Ga., for example, paid 6.49% interest to float an issue. A block of Government-guaranteed local public-housing bonds was offered to investors at a record annual yield of 5.55%. For a person in the 50% federal income-tax bracket, that is the equivalent of an 11% return before taxes on ordinary stocks or bonds...
Other Administration proposals chip away at a variety of much-abused tax devices. These include some debt-securities popular with conglomerates, such tax shelters as farm losses and certain trust income. Another target is "multiple subsidiaries"-a method by which some companies split up into myriad separate firms to take advantage of the lower tax rates (22% v. 48%) imposed on businesses with less than $25,000 income. Nixon also took aim at some wild abuses by tax-exempt organizations. Among other things, private foundations would be required to substantiate their charitable activities and be barred from financial dealings with...
...authority will have the power to issue tax-exempt bonds to finance college construction projects. Because they are tax free, the interest rate on the bonds will be substantially lower than the going open market interest rate--one of the customary sources of funds for University construction...
...whole operation is the tax-free bond. Since holders of bonds issued by such local and state authorities do not have to pay federal income tax on the proceeds of the bonds, they are willing to accept a lower interest rate than they otherwise would demand. Currently, the interest rate on the tax-exempt bonds is slightly more than four per cent. Borrowing at a bank can cost about seven per cent. Harvard gets an annual return of about 5.8 per cent on its general investment funds...
...speech Wallace hammered way at now familiar themes as he attacked federal open housing legislation, school bussing, anti-war students, college professors, the tax-exempt status of the national foundations, and Harvard...