Muni Pros Offer Mixed Views on Presidential Candidates

Municipal analysts and market participants offered mixed views about how municipal bonds would fare under the tax proposals of Republican presidential candidate Mitt Romney and President Obama. They  were handicapped, in part, because Romney has still not disclosed the details of many of his proposals. Some market participants contend that Obama’s plans to raise tax rates and permanently reinstate the Build America Bond program would help the muni market, despite his plan to cap the value of tax-exemption at 28% for higher income earners. They warn that Romney’s proposal to lower tax rates without adding to the federal deficit could be more of a threat because the former Massachusetts governor will have to find more revenue, potentially making munis an attractive target, even though he has never specifically mentioned the muni market. But several analysts and market participants warned that both candidates’ plans could potentially be disastrous for munis. Romney and Obama agree that the U.S. tax code is too complicated and needs to be overhauled. Despite that, there are stark differences in how each presidential candidate would tackle tax reform.

Bond Buyer

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