The impact of US tax reform

First and foremost, after the coming into effect of the Tax Cuts and Jobs Act, municipal (muni) bond income remains tax-free at the federal level for individual investors, as it has been since the federal personal income tax was established in 1913.

Personal income tax rates were adjusted modestly by the act, including a reduction in the highest marginal rate from 39.6 percent to 37 percent. From a technical perspective, this should have minimal effect on demand from individual investors who own almost two-thirds of the market.