Tax-arbitrage breakeven mechanism: BSV taxable yield versus VTES tax-exempt yield across the investor's marginal federal bracket 0% 1% 2% 3% 4% 4.5% 0% 10% 20% 30% 32.13% 40% 45% Investor marginal federal rate t After-tax yield crossover t = 32.13% BSV after-tax 4.026% × (1−t) VTES exempt 2.732% flat BSV after-tax 2.738% VTES exempt 2.732%
Marginal federal rate t 32.0%
BSV after-tax 2.738%
Gap (BSV − VTES) +0.006 pp
VTES exempt 2.732%

At t = 32.0%: BSV wins by ~0.006 pp (within rounding of breakeven). State and local tax can tip the call toward VTES.