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URL:  http://boards.fool.com/if-one-is-in-a-high-tax-state-we-have-a-93-24311144.aspx

Subject:  Re: 6 mo. CD Date:  7/6/2006  3:12 PM
Author:  Lokicious Number:  17404 of 35363

If one is in a high tax state, (we have a 9.3% state income tax), is it correct that one is better off with 6 month T-bills at present, since they are not subject to state tax? I ran the calculation and it appears to be the case. Am I missing something?

I didn't run a calculation, but that's probably correct. In a high tax state, it will take a major anomoly, under present overall conditions, for you to get a CD that beats T-bills.

When Treasuries were very low, a couple of years ago, it was pretty easy to find 5-year CDs that beat 5-year Treasuries and TIPS, even after high state taxes. I'm not sure about short term choices. But, anyway, things have leveled off.
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