In 2013, Congress approved legislation proposed by the Obama administration to increase the income tax rate...

In 2013, Congress approved legislation proposed by the Obama administration to increase the income tax rate on high-income taxpayers from 35% to 39% when it repealed tax cuts implemented under the Bush administration.
Using bond demand and supply analysis, explain what was the effect of this income tax increase on interest rates in the municipal bond market relative to those in the Treasury bond market?

Expert Solution

Rahul Sunny answered 2 years ago

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