How will the tax reform plan impact municipal investing?

I have some municipal funds in my portfolio. The yields are low but are exempt from Federal taxes. How will the new tax reform plan impact municipal investing?

Investing, Taxes
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January 2018

Tax reform will decrease tax liabilities for both individuals and corporations. And bond issuance could increase to help support the infrastructure spending the Trump Administration has apparently proposed. How all this will affect municipal bonds is still uncertain.

By reducing marginal tax rates for most individuals and corporations, municipal bonds should remain an attractive option for individual investors.

Although on the corporate side, lowering the corporate income tax rate could potentially affect demand because muni bonds would become less attractive relative to corporate bonds for institutional buyers.

 

January 2018
January 2018