Friday, December 14, 2012

The Muni Bond Loophole

You know that a tax preference is in trouble when it begins to be labeled a "loophole" in the popular press.  The tax freedom for municipal bond interest is starting to get that treatment.  See this, for example.

Personally, I think that eliminating the tax freedom for all future muni bonds is a great idea.  Of course, the value of existing tax-free bonds will then zoom, so there would be some windfall profits. That's the transition price to pay.

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