A Muni Tax Plan that Only Makes Sense in Wonderland

Obama wants to tax municipal bonds in order to raise money to fund the proposed infrastructure bank and school building projects, which will then provide funds to municipalities that will no longer be able to afford to raise money for infrastructure and school projects, because the cost of municipal bonds will be too expensive thanks to Obama's infrastructure bank funding. Sound like you've tumbled down a hole and are talking to a Cheshire Cat that looks like Obama? Well you haven't eaten any funny mushrooms, Alice, and this is no dream. Here's analysis from Citi -   US Municipal Strategy Special Focus Why Is The Tax-Exempt Status Of Municipals Under Assault?  The Administration's new Jobs Bill includes an unpleasant surprise for state and local governments  Specifically, the bill would cap the value of the tax exemption for high-income investors at 28%. This change would, in our view, increase state and local borrowing costs significantly, and for the first time,...(Read Full Post)