FMNY - Municipal Bonds: Election And Tax Implications

2024-04-20 04:45:00 ET

Summary

• The upcoming Presidential election is increasingly capturing the market’s attention.
• The TCJA likely expires, raising tax rates for all—notably, top earners, with a hike to 40%.
• Regardless of the election outcome, the ever-increasing federal deficit underscores the importance of revenue, with individual income taxes remaining a primary source for the U.S.

As the U.S. Presidential election draws nearer, many investors are eyeing the future of the soon-to-expire 2017 Tax Cuts and Jobs Act- a significant individual tax code overhaul that reduced taxes across income levels-and more specifically, its potential impacts on the municipal bond market. Although each possible election outcome will likely result in different tax scenarios, municipal bonds are set to maintain their tax-equivalent-yield advantage no matter the outcome. ...

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