Tax-the-Rich Boosts Appeal of Bonds That Give Shelter to Wealthy

Democrats around the country are pushing forward on plans to tax the rich — moves that are supportive for the tax-exempt municipal-bond market.

The state of Washington just instituted its first income tax in nearly a century with a levy on millionaires, while Maine lawmakers passed a 2% surcharge on income over $1 million, affecting an estimated 2,600 filers. Meanwhile, progressive lawmakers in Minnesota are proposing a tax on decamillionaires, those whose net worth tops $10 million, though the plan faces an uphill battle in the legislature.

The momentum toward higher taxes on the wealthy bodes well ...