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Why Wall Street’s Muni-Bond Desks Welcome the Tax-the-Rich Push

Feb. 4, 2019, 6:48 PM

Politics aside, one corner of Wall Street is likely welcoming Democrats’ talk of raising taxes on the rich.

Higher rates tend to be a good thing for the $3.8 trillion state and local government bond market, a haven for investors looking for income that’s exempt from federal taxes. And progressive Democrats looking to define their party’s platform ahead of next year’s presidential election have made boosting rates on the wealthiest Americans a key part of their agenda, seeking to seize on discontent with rising income inequality.

If history is any guide, that might be a good thing for returns, at...

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