The least helpful nugget of tax advice. Ever.

Don’t forget tax-free interest: Remember, to figure the taxable-equivalent yield of a tax-free bond, divide the tax-free yield by 1 minus your marginal tax rate. Because Gingrich’s marginal rate is 35 percent, a 3.5 percent tax-free yield is worth the same as a 5.38 percent taxable yield (3.5/0.65). Romney was hit by the alternative minimum tax in 2010, so his marginal rate was 28 percent. Avoiding a 28 percent tax makes a 3.5 percent tax-free rate equal to a 4.86 percent taxable yield (3.5/0.72).

Any questions?


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