WASHINGTON -- One of the proposals now being bandied about to liberalize the arbitrage restrictions on tax-exempt bonds offers both rewards and risks that should be carefully considered.

The proposal, included in similar tax measures introduced by Rep. Beryl Anthony, D-Ark., and Sen. Max Baucus, D-Mont., to simplify and ease some of the 1986 bond curbs, would allow issuers who must rebate arbitrage profits on an issue to retain 10% of their arbitrage profits.

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