Calculator: Tax-Free vs. Taxable Yield Comparison
Compare what you need to earn on a taxable security to equal the tax-free yield of a municipal bond.
Your results will appear in the right column.
About the Chart
This chart assumes that all municipal bonds are free from both federal and state income taxes. Your total effective rate, calculated above, takes into account the fact that any state income tax paid will reduce the amount of federal tax, because the state tax payment is deductible for federal tax purposes.
Federal income tax brackets are adjusted annually for inflation. Those used here are estimated for 2006. This chart doesn't take into account the alternative minimum tax or any intangible taxes. It is for illustrative purposes only and isn't representative of any specific security. The information has been obtained from sources believed to be reliable, but we do not guarantee its accuracy or completeness.
Certain assumptions may apply, which will be explained below the chart.