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Taxes on Tax‐Exempt Bonds [PDF]

open access: possibleThe Journal of Finance, 2007
ABSTRACTImplicit tax rates priced in the cross section of municipal bonds are approximately two to three times as high as statutory income tax rates, with implicit tax rates close to 100% using retail trades and above 70% for interdealer trades. These implied tax rates can be identified because a portion of secondary market municipal bond trades ...
Andrew Ang, Vineer Bhansali, Yuhang Xing
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