Do you think it is fair that municipalities can sell bonds on which the federal tax is not applied?
In order to comprehend the issue of federal tax and its application, a scrutiny must be given to what municipal bonds really are. As such, this are loans that investors make to local government. They comprise of three major constituents, that general obligation bond whose which requires the borrower to repay using the existing current revenue. We also have, revenue bonds which are concerned with the payment of programs that generate revenue to the municipal. Lastly is the type of bonds that is made on behalf of private entities for the purposes of public utility.