- October 13, 2024
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High-net-worth individuals often hold tax-exempt municipal bonds for income and relative safety.
So when President Barack Obama recently threatened to lower the tax break for high-income couples, the announcement made the phones ring at money management firms such as Naples-based Wasmer Schroeder.
Wasmer Schroeder, which specializes in fixed income and has an excellent track record with its municipal-bond portfolios, says passage of such legislation is highly unlikely.
In a note to clients titled “President Obama's Municipal Curveball,” Wasmer Schroeder points out that cash-strapped municipalities would be opposed to any deal that reduce municipal bonds' appeal and raise borrowing rates. That prospect alone is one big reason why such legislation is unlikely to pass.
Still, the firm told clients it is tracking the issue closely. You never know what curveball the government is going to throw next.