Muni Tax Exemption Risks Becoming Target as Ownership Narrows
- Study says share of households ownership fell by 50 percent
- Proposals to curtail municipal market’s tax break perennial
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Municipal bonds are becoming concentrated in a fewer number of hands and that may not be good for bondholders and states and local governments.
The share of households owning muni bonds fell by almost half between 1989 and 2013 to 2.4 percent from 4.6 percent as the focus of their investing has shifted to tax-deferred retirement accounts such as 401(k) plans, according to a paper by faculty from Brandeis University and the Massachusetts Institute of Technology.