Municipal Bond Forum
Highly unlikely tax-free munis become taxable
Q
I do enjoy your occasional remarks about muni bonds very much. Having said that, what is the likelihood that muni bonds could lose their tax-free status?
A
James A. Klotz responds:
Naturally, in the current economic environment anything is possible. This however, would require an alternate method of financing municipal projects.
Regardless, we think the likelihood of this occurring would be remote and if it did, existing bonds would have to be grandfathered in and remain tax-exempt.
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