SAN FRANCISCO Jan 2 With U.S. municipal bonds'
tax exempt status not affected by the deal that averts the
"fiscal cliff," tax-exempt debt issued by states and cities
should gain value "at least for now," a Wells Fargo Securities
report said on Wednesday.
The report said there is "increased value for the tax
exemption given the higher taxes on the wealthy and the new
investment income tax, at least for now."
The report noted it is "still conceivable" Congress could
limit municipal debt's tax exemption in its search for revenue.
The $3.7 trillion U.S. municipal bond market has been
closely tracking the wrangling in Washington over the nation's
finances out of concern that federal tax-exemption policies on
muni debt's interest payouts, a top attraction for investors,
could be changed by federal policymakers.