MutualFundWire.com: Congress: Don't Ban Muni Bond Tax Exemption

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Monday, July 15, 2013

Congress: Don't Ban Muni Bond Tax Exemption

Good news for municipal bond fund PMs: It looks like Congress has the municipal bond market's back.

As many as 137 lawmakers opposing a ban on the tax exemption for municipal bond income, InvestmentNews' Jeff Benjamin reported.

Members of Congress (92 House Democrats and 45 Republicans) signed a letter that went to Speaker John Boehner and Minority Leader Nancy Pelosi.

The main support for a ban on the exemption, which was written in 1913, is at the White House and Treasury, but president of the advisory fixed income firm Breckinridge Capital Advisors, Peter Coffin, is still worried:

“Nobody in Congress is really fighting for the 28% exemption, which makes me worry that it could end up getting bargained away,” he said. “In spite of the fact nobody is in favor of it outside of the administration, I think it's still a threat.”