3 Great Mutual Funds to Earn 2% - 3% in Municipal Bonds

If you make a lot of money and live in a high-tax state, municipal bonds can be magic.

The main appeal of bonds issued by state and local governments is that Uncle Sam doesn't tax the interest. But that break became less valuable to individual investors, banks and companies with the tax cuts Congress passed last year. A married couple with $200,000 in taxable income and filing jointly will have a 24% marginal tax rate in 2018, down from 28% in 2017. So a 3% tax-free muni yield now is worth the same as a taxable yield of 3.9% to that couple, down from 4.2% in 2017.

Earnings for All

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Tom Petruno
Contributing Writer, Kiplinger's Personal Finance
Petruno, a former financial columnist for the Los Angeles Times, is an independent investor, writer and consultant. He lives in L.A.