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
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

Mesirow acquires part of flexPATH in second retirement deal of 2026
Mesirow acquires part of flexPATH in second retirement deal of 2026

Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.

Advisor moves: LPL lands $350M veteran advisor duo in Florida
Advisor moves: LPL lands $350M veteran advisor duo in Florida

Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.

SEC accuses crypto firm founder of running $425 million Ponzi scheme
SEC accuses crypto firm founder of running $425 million Ponzi scheme

It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.

MassMutual Ascend tops $2 billion in RIA annuity sales as advisors warm to income products
MassMutual Ascend tops $2 billion in RIA annuity sales as advisors warm to income products

Ten years after entering the fee-based annuity market, MassMutual Ascend says nearly half its lifetime sales came in the past two years alone – but barriers remain among fee-only advisors.

Fintech bytes: Wealth tech firms target advisor productivity with new integrations
Fintech bytes: Wealth tech firms target advisor productivity with new integrations

Amplify, WealthReach, Zeplyn and Zocks have unveiled partnerships aimed at automating portfolio management, content creation, account opening, and client communication.

SPONSORED Direct indexing webinar targets tax-loss harvesting amid market swings

Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income