Tax rates on the market for municipal bonds

Tax rates on the market for municipal bonds

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Reference no: EM13691117

Suppose a candidate who runs on a platform of “soak the rich” wins the 2016 presidential election. After being elected, he or she persuades Congress to raise the top marginal tax rate on the federal personal income tax to 65%.

a. Use one graph to show the effect of this change in tax rates on the market for municipal bonds ( price and yield) and another graph to show the effect on the market for U.S. Treasury bonds (price and yield)

Reference no: EM13691117

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