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GOP Eyes Taxes on Municipal Bond Interest: What You Need to Know

The article from MSN discusses a potential policy shift by the GOP regarding the tax-exempt status of municipal bond interest. Traditionally, interest earned on municipal bonds has been exempt from federal income tax, making these bonds attractive to investors seeking tax-free income. However, as part of broader tax reform discussions, some GOP lawmakers are considering changes that could tax this interest, aiming to reduce the federal deficit and possibly fund other tax cuts. This proposal has sparked debate because it could increase borrowing costs for states and local governments, potentially affecting infrastructure projects and public services. Critics argue that taxing municipal bond interest would undermine the financial stability of these entities, while proponents believe it could lead to a more equitable tax system. The article outlines the implications for investors, who might see reduced after-tax returns, and for municipalities, which could face higher interest rates when issuing new bonds.

Read the Full Kiplinger Article at:
[ https://www.msn.com/en-us/money/markets/gop-eyes-taxes-on-municipal-bond-interest-what-you-need-to-know/ar-AA1BN91h ]