Tax-Free Status of Muni Bonds Seen Threatened in Next Congress

Congress is “increasingly likely” to alter the tax-free status of municipal bonds as part of a policy shift next year, such as by capping the value of the tax exemption, according to a note from Municipal Market Analytics.

• “Based on our evolving understanding of the situation, MMA sees Congress as increasingly likely to damage the tax exemption as a means to pay for extension of the TCJA’s individual tax law changes, with a cap on the value of the tax exemption overall seeming to become more likely than other alternatives,” the note said
• During the Obama administration, a 28% ...