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What is a special bond?

investopedia.com - Special Assessment Bond Definition - Investopedia

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What is Special Assessment Bond?

Special assessment bonds are general obligation bonds, commonly issued to fund development projects, where the interest owed is paid by taxes levied solely on the beneficiaries of that project. Key Takeaways Special assessment bonds are general obligation bonds, commonly issued to fund development projects, where the interest owed is paid by taxes levied solely on the beneficiaries of that project. Interest on special assessment bonds is exempt from federal taxes, and most state and local taxes.

Special assessment taxes cannot exceed the total cost of the project.

1:30 General Obligation (GO) Bonds Definition

Understanding Special Assessment Bond

A municipal bond is issued by a state or local government to raise capital to fund projects such as highways, sewage systems, recreational parks, public schools and so on. When a municipal bond is issued to sponsor the improvement of properties in a specific area of a city, town, or county, the bond is referred to as a special assessment bond. Investors that purchase a special assessment bond receive periodic interest from the issuer until the bond matures, at which time the principal will be repaid to bondholders. The payment obligations on the bond are guaranteed from revenue that is received from the portion of taxes levied on residents that directly benefit from the project. In other words, additional tax is imposed only on those who will benefit directly from the improvement to defray the payments on the bond issue. Special assessment taxes cannot exceed the total cost of the project. For example, if a special assessment bond was issued to pay for sidewalks to be re-paved in a certain community, an additional tax would be levied on homeowners in the area benefiting from this project. Area homeowners get nicer walking paths, and will probably see the value of their property increase accordingly, but this comes at a price. Their property taxes will increase to pay the interest owed to the bondholders by the municipality. Since the interest on special assessment bonds is paid by taxes of the community that benefit from the development, it is not unusual for the members of the benefiting community to invest in the issue, thereby, offsetting the additional taxes that are levied in order to finance the bond. The interest on a special assessment bond may be fixed or variable. The length of maturity will vary depending on how complex the project is, with the typical maturity range falling between one to 20 years. Furthermore, these bonds may or may not be backed by the full faith and credit of the municipal government. If it is not secured by a full faith and credit pledge, it is more risky than a general obligation bond of the same issuer. Like most municipal bonds, the interest on special assessment bonds is exempt from federal taxes, and most state and local taxes if the investor lives in the state or municipality issuing the debt. The higher an investor's marginal tax rate, the more valuable the bond's tax exemption is and, thus, more desirable. Therefore, there is usually stronger demand for special assessment bonds in states with high tax rates. If a state or the federal government reduces tax rates, the bonds lose some of their advantage for high-tax-bracket individuals and, thus, become less desirable.

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Do first borns look like father?

In concluding the study, co-author and psychologist at the University of Padova in Italy Paola Bressan noted that to the best of her knowledge, “no study has either replicated or supported” the findings from the 1995 study that stated babies resemble their fathers.

kiindred.co - Do first-born babies actually look more like their fathers? - Kiindred

There’s an old theory that says first-born babies were genetically predispositioned to look more like their father. It was believed this was so the father accepted the child was his and would provide and care for them. There’s also another theory that says it was so he didn’t eat the baby… These theories obviously date way, way back, long before paternity tests existed (or cannibalism was frowned upon). But even today, all new parents can’t help but look at their baby and wonder, who does it look like? It’s often one of the first things people will comment on when they meet a little one for the first time.

But is there actually any truth to the theory at all?

A 1995 study from the University of California sought to prove the theory by matching photos of 1-year-old children with pictures of their father. The study asked 122 participants to match photos of children at 1-year, 10-years and 20-years with photos of both their mothers and fathers. In infants, just under 50% guessed correctly for the fathers, as opposed to around 37% for the mothers. The success rates decreased significantly in 10-year-olds and rose slightly again in 20-year-olds. A similar study in 2004 with a much larger sample size found that, in fact, most infants resemble both parents equally. In concluding the study, co-author and psychologist at the University of Padova in Italy Paola Bressan noted that to the best of her knowledge, “no study has either replicated or supported” the findings from the 1995 study that stated babies resemble their fathers.

But even though the science isn’t there to back up the theory, why do so many of us say it rings true, that firstborns do tend to look more like their father?

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