Municipal Bond Forum
State of munis if corporate tax rates were cut
Q
If corporate tax rates were reduced to, say, 25%, do you think the municipal bond market would be OK in terms of demand?
A
James A. Klotz responds:
An “A” rated corporate bond today will yield approximately 4.50% to 4.75%. This would equate to an after-tax return of 3.375% to 3.56% for an investor in the 25% tax bracket.
Municipal bond rates would compare favorably to these after-tax returns of corporate bonds.
Additionally, munis do not create taxable income that can push an investor into a higher bracket.
Start here.
Do you have specific criteria for bonds you’re looking for? Let us know and we’ll e-mail you bonds that fit your needs. There is no charge for this service.
This report is produced solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. This report is based on information obtained from sources believed to be reliable but no independent verification has been made, nor is its accuracy or completeness guaranteed.