The question isn’t if, but “how high” taxes will rise for individuals in the top tax brackets. The chart in the referenced WSJ article shows how high taxes have been historically, and further shows that the precedent to raise taxes has long been established.
Tax rates likely to rise. What to do?
Marginal tax rate and capital gains increases are likely to boost demand for tax-exempt bonds. “The Obama tax hike [on the marginal rates] would mean that muni investors could buy bonds about 40 basis points richer in yield to achieve the same after-tax yield,”said Matt Fabian, a managing director at Municipal Market Advisors.
MainLine West has several Advisory Notes regarding tax considerations and the Build America Bonds (BAB) taxable bond opportunities. Contact us for copies of these documents.
White House Unveils Tax-Rate Details- WSJ.com
Obama’s Proposed Tax Hike Could Boost Demand for Munis – Bank Investment Consultant.com