BondsOnline NetworkBondsOnlineBondsOnline Quotes

BondsOnline Fixed Income Investing              


BondsOnline.com: instant access to and extensive coverage of over 3.5 million stocks, bonds, indexes and other securities covering major and emerging markets and exchanges across the globe.
Treasury Bonds Bond Yields
 
Bond News
Bonds Online
Bonds Online
Bonds Online
Bonds Online
11/21/2014Market Performance

S&P Indices
Municipal Bonds
S&P National Bond Index 3.06% -0.01
S&P California Bond Index 3.17% -0.01
S&P New York Bond Index 3.21% -0.01
S&P National 0-5 Year Municipal Bond Index 0.85% 0.00
S&P/BGCantor US Treasury Bond 405.03 0.42
More
Income Equities:
Preferred Stocks
S&P U.S. Preferred Stock Index 825.66 1.16
S&P U.S. Preferred Stock Index (CAD) 687.47 -3.62
S&P U.S. Floating Rate Preferred Stock Index 740.42 0.16
S&P U.S. Floating Rate Preferred Stock Index (TR) 1,271.99 0.27
S&P U.S. Preferred Stock Index (TR) 1,834.50 2.57
S&P U.S. Preferred Stock Index (TR) (CAD) 1,527.46 -8.05
S&P U.S. Fixed Rate Preferred Stock Index 838.53 1.31
S&P U.S. Fixed Rate Preferred Stock Index (TR) 1,879.78 2.94
REITs
S&P REIT Index 176.11 1.08
S&P REIT Index (TR) 458.09 2.80
MLPs
S&P MLP Index 2,888.60 1.14
S&P MLP Index (TR) 6,878.07 2.72
See Data


Bonds Online
Print this Page Print Version   Email this Page to a Friend Forward to a Friend     Share  

Muni Tax-Exemption Tweak Is Idea Whose Time Hasnít Come: View

REUTERS - Sept. 19, 2011 - By the Editors

We’ve argued that the notoriously convoluted U.S. tax code requires a comprehensive overhaul that would phase out distortions. But discrete tweaks to the system can and often do create more problems than they solve.

President Barack Obama’s proposal to reduce the exemption that high earners can claim on interest for their municipal-bond investments is a good example: It should be rejected on the grounds that it only makes sense as part of a sweeping reform.

Politicians have been trying to kill the special tax status of muni bonds since Andrew Mellon was Treasury secretary almost 100 years ago. But there are a few good reasons the federal government has wanted to keep the exemption: State and local governments are a (rightly) powerful constituency; capital markets are the most efficient way to match investors with local infrastructure needs, and should be encouraged; and municipal projects tend to be in the public interest.

The administration justifies the measure -- one of several intended to pay for the $447 billion American Jobs Act -- as a means of getting the rich to kick in their “fair share.” It’s true that higher earners are the greatest beneficiaries of this tax benefit. But significantly limiting the exemption would probably cause collateral damage in the long run by driving up interest rates for municipalities to borrow. That would mean higher taxes, more expensive services and a lower propensity for local governments to undertake capital projects.

In other words, it won’t just be “millionaires and billionaires” footing the bill -- it will be everyone.

Effect on Market

How disruptive would this new tax, which the administration estimates will bring in $30 billion a year, be for the muni market? A report from Morgan Stanley Research saw little impact, pointing out that the premiums investors demand to hold munis over Treasuries “have little direct relationship with tax rates historically.” A report from Citigroup Global Markets, by contrast, argued that curbing the exemption would “increase state and local borrowing costs significantly.” On balance, we suspect the impact on interest rates will be relatively small initially. (Certainly the proposal has had little effect on the market since the announcement, according to Bloomberg pricing data.) Of course, that could change rapidly if historically low Treasury yields rise and munis start to look less attractive.

For the complete article.
Bonds Online
Partner Market Place
Bond Maturity
What kind of BONDS do YOU own?  The DRL Group - Fixed Income Specialists: DRL Group LP is a branch office of and securities offered through WFG Investments, Inc. (WFG), member FINRA & SIPC. Registered REpresentatives of WFG Investments
Bonds Online
Stuff to look at
Yield and Income Newsletter: A must have for income investors. subscribe NOW

S&P Commentary and Newsletters: S&P
Bonds Online
BondsOnline Advisor
BondsOnline Advisor Income Security Recommendation... October 2013 Issue (click here)

Keep up with monthly, in-depth coverage of fixed income market strategies, commentary, and insights as seen by our sources. Sign up for the free BondsOnline Advisor now!

Unsubscribe here [+]
Bonds Online
Bonds Online
Bonds Online