Vineer Bhansali

Publications (2)0 Total impact

• Source

  Available from: SSRN

  Article: Taxes on Tax-Exempt Bonds

  ANDREW ANG, VINEER BHANSALI, YUHANG XING
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  ABSTRACT: Implicit tax rates priced in the cross section of municipal bonds are approximately two to three times as high as statutory income tax rates, with implicit tax rates close to 100% using retail trades and above 70% for interdealer trades. These implied tax rates can be identified because a portion of secondary market municipal bond trades involves income taxes. After valuing the tax payments, market discount bonds, which carry income tax liabilities, trade at yields around 25 basis points higher than comparable municipal bonds not subject to any taxes. The high sensitivities of municipal bond prices to tax rates can be traced to individual retail traders dominating dealers and other institutions. Copyright (c) 2010 the American Finance Association.
  Journal of Finance. 01/2010; 65(2):565-601.
• Source

  Available from: SSRN

  Article: Build America Bonds

  Andrew Ang, Vineer Bhansali, Yuhang Xing
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  ABSTRACT: Build America Bonds (BABs) are a new form of municipal financing introduced in 2009. Investors in BAB municipal bonds receive interest payments that are taxable, but issuers receive a subsidy from the U.S. Treasury. The BAB program has succeeded in lowering the cost of funding for state and local governments with BAB issuers obtaining finance 54 basis points lower, on average, compared to issuing regular municipal bonds. For institutional investors, BAB issue yields are 116 basis points higher than comparable Treasuries and 88 basis points higher than comparable highly rated corporate bonds. For individual investors, BABs have lower yields than regular municipal bonds. Thus, on average the Federal government subsidy disadvantages individual U.S. taxpayers, who are the main holders of municipal bonds, and benefits new entrants in the municipal bond market.
  National Bureau of Economic Research, Inc, NBER Working Papers. 01/2010;