Knowledge is Power: Arkansas Government 101: Bonds are Future Tax Increases
Lately, many states, counties, and cities are trying to avoid the traditional tool to grow government by "issuing" BONDS. This is now happening all over the state at all levels. Rather than passing a tax increase, local governments are now touting the idea of selling bonds as the best way to fund projects "without raising taxes." What government doesn't tell you is that these bonds are essentially tax increases by another name.
Bonds are simply borrowed money which must be repaid... starting with high and usually tax-free (to the lender) interest. It is true the government starts paying tax-free interest on the debt (bonds) immediately, but when the bonds are due, future taxpayers, such as our children and grandchildren, will be on the hook for repaying the bond principles from increased taxes. Take this quiz to learn the basics of bonds and what they mean for YOU, the taxpayer.
