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20. Assume you live in a state with a state income tax. The current Republican tax bill will get rid of the tax deductibility of
20. Assume you live in a state with a state income tax. The current Republican tax bill will get rid of the tax deductibility of State and Local Taxes (SALT) when filing your Federal Income Taxes. This means you will no longer be able to deduct amount of the state income tax you pay when you file your federal income taxes. If you invest in a Treasury Bond that pays an annual coupon interest rate of 4% and you are in a 50% marginal tax bracket, what is your annual after tax return on the Treasury Bond? What would your annual after-tax return be if you invested in a municinal hond issued by your State Government that pays 3% per year
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