municipalas

Municipalas, also known as municipal bonds or munis, are debt securities issued by state and local governments in the United States to finance public projects such as infrastructure, schools, and hospitals. These bonds are a crucial tool for governments to raise capital without directly increasing taxes. Municipal bonds are typically considered less risky than corporate bonds because they are backed by the taxing power of the issuing municipality, or by revenues generated from the specific project being financed.

There are two main types of municipal bonds: general obligation bonds and revenue bonds. General obligation bonds are backed by the full faith and credit of the issuer, meaning the government can use its taxing authority to repay bondholders. Revenue bonds, on the other hand, are repaid from the income generated by a specific project, such as toll roads or water systems. A key feature of municipal bonds for investors is their tax-exempt status. Interest earned on most municipal bonds is exempt from federal income tax, and sometimes also from state and local taxes, making them attractive to investors in higher tax brackets seeking tax-advantaged income.