The lowering of the 35% corporate tax rate down to 21% will cause our local government borrowing costs to go up.
Investors tend to favor making loans where they make the most money and have the greatest assurance that they will get their original money back.
Before the change in corporate rates investors chose between government bonds where the interest rates were lower than commercial bonds but where the government bonds generated tax free income.
Now with a 21% corporate tax rate investors will understand that lending to companies will be safer because the companies will be paying less tax and thus make more money.
Local governments will have to offer higher interest rates to investors if they want to compete for money.
Remember that between the city and the school districts we have over $1.5 billion of bonds that have been authorized but not sold yet.
Continuing down the path of going into debt is going to cost us more now.
We deserve better