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Muni bonds are a more attractive option for investors in high-tax states and cities, so investors in those areas should be sure to calculate the tax-equivalent yield on potential muni investments.
The post Municipal Bonds vs. Corporate Bonds appeared first on SmartReads by SmartAsset. While both municipal and corporate bonds can generate consistent income, they are distinct in several ways ...
Here’s a look at the primary risks associated with municipal bonds: Interest Rate Risk. Interest rate risk is one of the key threats to municipal bond investors.. When interest rates rise, the ...
A municipal bond, commonly known as a muni, is a bond issued by state or local governments, or entities they create such as authorities and special districts. In the United States, interest income received by holders of municipal bonds is often, but not always, exempt from federal and state income taxation.
That perception could thus potentially allow a local government to borrow at a lower interest rate, saving its taxpayers' money over the life of the bonds. Despite that advantage, many states, such as California under Proposition 13 , do not allow local governments to issue unlimited-tax general obligation debt without a public vote .
Revenue Bond of the City of New York, issued 3. June 1858, signed by mayor Daniel F. Tiemann. A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds, rather than from a tax.
Municipal bonds look a lot like other kinds of bonds. State and local governments issue muni bonds in order to finance a variety of public projects, ranging from general budget outlays to specific ...
Most jurisdictions only allow bonds to be floated based upon a portion (usually capped at 50%) of the assumed increase in tax revenues. For example, if a $5,000,000 annual tax increment is expected in a development, which would cover the financing costs of a $50,000,000 bond, only a $25,000,000 bond would be typically allowed.