Bonds
Trump Victory Threatens Key Muni Tax Break in Hunt for Revenue
- Muni bonds pay interest to investors exempt from income taxes
- Eliminating the tax break seen as option to pay for tax cuts
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The tax break offered to municipal bond investors is coming under threat as Republicans are closer to taking control of both the White House and Congress.
President-elect Donald Trump has promised to further cut corporate taxes and even eliminating the federal income tax. If he goes through with those plans, lawmakers will need to find additional revenue to offset the cuts’ trillion-dollar price tag. The muni tax-exemption — estimated to cost the US government less than $40 billion each year — has long been seen as a possible source of funding.