Plans to tax munis won't fly, says BNY Mellon

Plans to tax munis won't fly, says BNY Mellon
Despite need to raise federal tax revenues, bank believes lawmakers will spare municipal debt
SEP 01, 2011
By  John Goff
Renewed proposals to eliminate the tax-exempt status of municipal bonds as a way to reduce the $1.5 trillion federal deficit are unlikely to succeed, said a report by BNY Mellon. Abolishing the asset class would drive up borrowing costs and further strain the budgets of muni issuers, leading to cuts in services and capital projects, according a report today by Standish Mellon Asset Management Company LLC, the fixed-income arm of the New York-based investment bank. A proposed budget submitted by Representative Paul Ryan, the House Budget Committee chairman, and a report from the Simpson-Bowles debt commission embraced by President Barack Obama in December 2010 both sought to eradicate the tax-exempt treatment of municipal bonds, the report said. “The urgent scramble to address the ballooning federal deficit will reasonably seek to uncover every scheme to broadly raise revenues, bringing all major tax expenditure loopholes under intense scrutiny,” wrote Steven Harvey, a senior portfolio manager, and Nathan Harris, a research analyst. “We believe it is unlikely that municipal entities will be penalized.” --Bloomberg News--

Latest News

The power of cultivating personal connections
The power of cultivating personal connections

Relationships are key to our business but advisors are often slow to engage in specific activities designed to foster them.

A variety of succession options
A variety of succession options

Whichever path you go down, act now while you're still in control.

'I’ll never recommend bitcoin,' advisor insists
'I’ll never recommend bitcoin,' advisor insists

Pro-bitcoin professionals, however, say the cryptocurrency has ushered in change.

LPL raises target for advisors’ bonuses for first time in a decade
LPL raises target for advisors’ bonuses for first time in a decade

“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.

What do older Americans have to say about long-term care?
What do older Americans have to say about long-term care?

Survey findings from the Nationwide Retirement Institute offers pearls of planning wisdom from 60- to 65-year-olds, as well as insights into concerns.

SPONSORED The future of prospecting: Say goodbye to cold calls and hello to smart connections

Streamline your outreach with Aidentified's AI-driven solutions

SPONSORED A bumpy start to autumn but more positives ahead

This season’s market volatility: Positioning for rate relief, income growth and the AI rebound