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Munis’ Tax-Exempt Status Could Be at Risk

PRESSmUPPRESSmUP
in Fund Discussions
Well, that's just swell. I wondered why the muni market was acting funny

"Munis’ Tax-Exempt Status Could Be at Risk. What It Means for Investors."

Heads up, municipal bond investors: Amid all the Trump 2.0 policy proposals, there is one you should be aware of: The potential for munis to lose their tax-exempt status. “Eliminate Exclusion of Interest on State and Local Bonds” is listed on page 9 of a 50-page House Budget Committee document prepared in January that lists some 200 ways the government could raise extra funds to offset the impact of extending the 2017 Trump tax cuts.

https://www.barrons.com/articles/munis-tax-exempt-status-risk-797eaaef?mod=Searchresults

Similar story from Bloomberg/Yahoo

"Trump Adviser Calls to End Muni Tax Break in Threat to Market"

Stephen Moore, an informal economic adviser to President Donald Trump, floated eliminating the federal tax subsidy for municipal bonds, a concerning sign for the market where states and cities raise debt.

https://finance.yahoo.com/news/trump-adviser-calls-end-muni-170017075.html

Comments

  • a2z

    yep, posted in 2024, been adding to since then, hoping it remains under the radar :

    https://www.mutualfundobserver.com/discuss/discussion/63101/tax-free-u-s-bond-market-and-gop-control-for-2-4-years#latest

    could be a bad idea anyway w/inflation...which a very large group of dolts expect as 0% !
    nothing outside long global recession could be farther from reality.

    image
  • PRESSmUPPRESSmUP
    edited March 22
    Municipals provide a tax break for the masses with an attractive taxable equivalent yield. If I had a team of accountants developing a cascading scheme of tax dodges, I wouldn’t have need for them. I’m afraid there’s a reason multiple articles popped up in such a short period of time.
  • a2z

    as hoped for, munis so far seem to narrowly escape trump's favors\grift\chaos radar...

    "...the potential demise of tax exemption under the Trump administration had helped crimp relative performance. That risk has seemingly gone by the wayside after the “The One Big Beautiful Bill” – that is the formal name – passed by the U.S. House of Representatives on May 22 maintained muni’s tax-advantaged status (the sprawling legislation now moves to the Senate, with further tweaks forthcoming)."
    giro\Grant's
  • PRESSmUPPRESSmUP
    Thanks much for the follow up.
  • FD1000
    https://www.morningstar.com/funds/why-are-muni-bond-funds-losing-money-2025
  • PRESSmUPPRESSmUP
    “The safer place for long end exposure is the municipal market because of the fiscal discipline that’s exercised at the state level.”

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