Investors fearful of the new cap on federal deductions of state and local taxes may find that municipal bonds offer a promising investing strategy. Because the new tax law limits these deductions to $10,000, everyone with state/local tax bills that are above that amount will lose part of this deduction starting in 2018. This is motivating people with high local taxes, usually from owning expensive homes, to seek investments that deliver returns without increasing their taxable incomes.
