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TAXPAYERS BOOST HOLDINGS OF MUNI SECURITIES IN 1990

 TAXPAYERS BOOST HOLDINGS OF MUNI SECURITIES IN 1990
 NEW YORK, May 19 /PRNewswire/ -- While taxpayers increased their


holdings of tax-exempt municipal bonds in 1990, only a small percentage of investors with adjusted gross incomes over $75,000 actually own tax- exempt munis, according to the Public Securities Association, the trade group representing municipal bond dealers.
 Data released recently by the Internal Revenue Service shows that in 1990, the most current year available, the number of filers reporting tax-exempt income increased from 3.8 million in 1989 to 3.9 million in 1990.
 The data shows that filers reporting dividend income from equity securities far outnumber those reporting tax-exempt income from municipal securities. Those reporting tax-exempt income comprised 7 percent of investors with adjusted gross incomes between $50,000 and $74,999, 13 percent of those in the $75,000 and $99,999 category and only 22 percent of those in the $100,000 and $199,999 bracket.
 By comparison, those reporting dividend income comprised 40 percent of the filers with adjusted gross incomes of $50,000 to $74,999, 54 percent of the filers in the $75,000 to $99,999 category and 66 percent of those in the $100,000 to $199,999 bracket.
 "The relative attractiveness and safety of municipal bonds has appealed to a growing number of investors in recent years. But it is surprising that many investors who should be considering municipal bonds as part of their portfolio are unaware of the benefits of investing in them," said Heather L. Ruth, PSA president.
 Individuals reported $40.6 billion of tax-exempt interest income in 1990, a 4.6 percent rise over the $38.8 billion reported in 1989.
 The greatest growth in investment in municipal bonds came from individuals with adjusted gross incomes between $50,000 and $74,999. Tax-exempt interest income rose 27 percent for this group, reaching $5.9 billion in 1990, up from $4.6 billion in 1989.
 Almost 68 percent of all individuals reporting tax-exempt income had adjusted gross incomes of less than $75,000. Individuals in this category reported $15.9 billion in tax-exempt interest income.
 PSA noted that investment in municipal bonds helps state and local governments to raise capital to build schools, roads, bridges, water and sewer lines, low-income housing, airports and many other essential public projects.
 For taxpayers in the 28 percent income tax bracket or above (taxable income over $34,000 on a joint return), municipal bonds offer an attractive after-tax return for relatively low risk when compared to other securities. For example, an investor would have to find a taxable investment yielding 9.72 percent to equal the return on a municipal bond paying 7 percent interest, free of federal income taxes. Comparing after-tax income from investing in municipal bonds free of state and local taxes as well is even more dramatic.
 PSA is the international trade association of banks and brokerage firms which deal in municipal securities, U.S. government securities, mortgage-backed securities and money market instruments.
 -0- 5/19/92
 /CONTACT: Joseph Sims or Caroline Benn of PSA, 212-809-7000, 212-440-9400, or 202-434-8400/ CO: Public Securities Association ST: New York IN: FIN SU: ECO


KD-PS -- NY091 -- 1975 05/19/92 15:42 EDT
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Date:May 19, 1992
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