European Stars and Stripes (Newspaper) - August 03, 1978, Darmstadt, Hesse                                Page 8 the stars and stripes thursday August 3, 1978 municipal Bonds give added income How to Dull the tax monster s bite this is the third article in a Lour part series on savings. By Bob hover staff writer arc you being eaten up by taxes if you Are. You May want to get acquainted with the tax free municipal Bond Market. With inflation now moving toward Dou ble digit figures tax free municipals Are one of the investments recommended to in crease income by decreasing taxes. In the past decade the percentage of individual americans investing in this mar Ket has doubled. As a result thousands of new investors some with nest eggs of $5. 000 or less now own municipal bunds or municipal Bond  overseas is no Barrier to taking advantage of tax free  Bond departments of invest ment banking firms Bond specially houses More than 1,000 exist throughout the . And brokerage firms advise clients on the purchases and Sale of municipals. Relative safety some individuals move into municipals when they inherit Money or receive a re enlistment Bonus. Others enter this Market by switching Money from other invest ments because of the relative safety and tax free nature of municipal Bonds. The interest on municipal Bonds is exempt from Federal income tax and generally exempt from income taxes in the state of Issue. The big advantage is that interest on municipals provides More income after taxes than a similar investment else where. But what about this Market just How available Are municipals there is no shortage of Bond issues to choose from. More than 40.000 american municipalities can Issue Bonds and a num Ber of these have several issues outstand ing. For All tastes dealers in Bonds claim there literally Are Bonds for All tastes. If you Are suspicious of big cities and Don t like the East try municipals from the South or West. By conservative estimate More than 50. 000 municipal Bond issues Are outstanding. Bonds Are issued by states counties Cit ies school districts Park districts universities and Turnpike commissions to finance such projects As streets and roads sewers hospitals water lines and schools. The prospective buyer will find that the life of Bonds varies widely from out standing issues which May have no More than a year or two until maturity to new issues which run up to 30 years. In general the longer the term of a new Issue the higher the merest  issues Are bought on what is known As the primary Market outstanding issues Are dealt on the secondary Market. Safety rating what about the safely of municipals some investment advisers rate them second Only to  government securities in terms of  do exist. Certain new York qty Bonds lost appreciable amounts Dur ing the City s financial crisis several years ago then ultimately recovered part of their loss with an improved economic out  w. Glass account executive for Hul Vest securities a Wall Street invest ment House specializing in municipals Points to Price stability and the fact that few municipalities default As sound Rea sons for buying into the Market. Historically municipal Bonds Var very very Little in Price Glass says and they Are quite liquid easy to con Vert to Cash. If an owner finds he needs Money there is no problem Selling municipals on the  Bonds Selling below face value Are known As discount Bonds those Selling above fare value Are Premium Bonds in general discount Bonds yield the higher interest but there arc exceptions a number of Premium Bonds currently yield 8 to 10 percent. In choosing a Bond the buyer must weigh the net investment potential of Dis count Premium and Par. Or face value Bonds. While exempt from Federal income taxes Bonds sold at a profit Are subject to Cap ital gains taxes. In the current Market Bonds yielding 6 to 7 percent Are considered a Good buy. Especially when the tax saving is taken into account. Even couples with a taxable in come of $20,000 a year or less can save an appreciable sum by investing in municipals compared to other interest invest  Small investors often shy away from municipals a number of dealers accept Small accounts. Because Bonds usually Are issued in minimum denominations of $5.000 for some the minimum is $1.000 most dealers require a minimum of $5.000 for direct in vestment into  says Multi Vest needs at least $5. 000 for the Bond Market but will accept an account of $2.000 for investment in Muni Cipal Bond  usually recommend wind funds for Small investors because of the relative stability of capital provided by most  for clients with $5.000. Richard Bunch portfolio manager at Dean Witter Reynolds in Frankfurt recommends Muni Cipal Bond  funds. Bunch Points out carry the same tax exemptions As Bonds and they have the added advantage of spreading the risk for the Small investor who can least afford to lose  shares of a number of Bond funds have lost value during the past year but some Market watchers expect at least a partial recovery once interest rates level off or Retreat. The risk of Bond storage a r some owners is answered by glut says that any reputable Bond House hold Bonds for a  added Protection now exists in Bond Market. Since 1970 the securities vistor Protection corp. Sip p customers of Security brokers and _. Against the forced liquidation of Nek firms. As a guide to the buyer two firms Idy s and Standard & poor a rate Miil Al Bonds. But because these firms of Ftp quire a fee for such ratings some qualm non rated issues May be available total Bond shopper. I. For answers to these and other qum i Lions about Bonds including the latest fag Ings and prices consult your Bond dealer broker or banking adviser. Tomorrow a look at capital gain to vestments. Some of the thousands of would be vacationers in line for seats aboard sir Freddie Laker s sky train service to sky train Shantytown new York Are sitting out their Long Waits in temporary shelters which protect them from London s rain. A Shantytown of haphazard plastic roofed temporary shelters has sprung of around Victoria station. A photo France expels accused Iraq envoys Paris a three iraqi diplomats accused of participating in a gunfight Al the iraqi embassy in which a French policeman was killed were expelled wednes Day under extraordinary Security precautions. The three iraqis were put in flak jackets before being driven from police Headquarters to orly Airport with an escort of five cars carrying members of a crack Gendar Merie anti terror squad. Police said the feared an attempt to kill the iraqis. President Valery discard d Estwing was quoted As saying the anger of French police Over the affair was understandable and even worthy of  police angered by the killing of their colleague staged a rare Public demons Lra lion in Central Paris tuesday., demanding thai the iraqis by tried in France rut presidential spokesman Pierre Hunt said after a Cabinet meeting unfortunately we ran up against the application of International rules which Are valid for  France has asked Iraq to try the men police Union spokesman Pierre Wale Loos said wednesday we Don t have Many illusions. We know How things work there we Are just about sure they will escape  the iraqi embassy Security men claimed diplomatic immunity after being arrested monday following the gunfight inthe Street outside the embassy the French foreign ministry accepted their claim. The foreign ministry said later it was re viewing the list of All persons with Diplo made status in Paris and the problem of gun licenses riven certain diplomats ranch says four embassy Security men opened fire on a terrorist who had surren dered after a Day Long siege of the Embum by. And on his police escort. A policem and an iraqi were killed. The terrorist. We policemen and an Arab league diploma were wounded. The iraqi Security men were held for 9 hours at police Headquarters before beg rushed to a heavily guarded area of on Airport to be put aboard an iraqi a which had brought minister of Sute a Asraoui from Bagdad to collect them. Iraqi ambassador Mundrup Al Windmo wednesday repeated his thesis that Ujj first shots were fired by accomplices terrorist said to be a member of a a Arafat s Fatah guerrilla organization he said the iraqi Secundy men hid no St auctions. From the embassy or from of dad. To fir on the terrorist