This title, while informative, is unfortunately not super related to the article itself, which is about municipal bonds, who buys them and asking the question, why are people buying fewer muni bonds than before?
It's not that fewer muni bonds are being bought, but that fewer individuals are buying muni bonds:
> What’s disturbing about the data is that the number of investors claiming tax-exempt interest -- the municipal market’s constituency, if you will, is falling, after reaching a peak of almost 6.5 million in 2008.
The likely reason is that muni bonds aren't competitive with ordinary treasury bonds for people in lower tax brackets due to market pressure from investors in high tax brackets. So they make sense for fewer people and rational lower income investors move away from them.
Given the number of muni debt isn't going down - someone must be owning it. I personally sold my munis after realizing I'm paying AMT on most of the bonds anyway so wasn't tax free for me.
> What’s disturbing about the data is that the number of investors claiming tax-exempt interest -- the municipal market’s constituency, if you will, is falling, after reaching a peak of almost 6.5 million in 2008.
The likely reason is that muni bonds aren't competitive with ordinary treasury bonds for people in lower tax brackets due to market pressure from investors in high tax brackets. So they make sense for fewer people and rational lower income investors move away from them.