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Taxation

Buckley Cautions 28% Cap Is Better Than 25% Tax Rate

JAN 28, 2013 2:50pm ET

The proposed 28% cap on the value of tax exemption would be a far less dangerous threat to the municipal bond community than a top income tax rate of 25%, a former congressional tax counsel said at the American Bar Association's tax-exempt financing committee winter meeting in Orlando, Florida.

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Comments (1)
The value of tax exemption is that it can serve as a hedge against rising rates.
Posted by newell | Monday, January 28 2013 at 8:46PM ET
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A recent phenomenon is the emergence of bonds with shorter call protection as funding alternatives for municipalities. However, the shorter call protection also dampens the potential upside for investors, which in turn reduces the price they are willing to pay.

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