That is because the 28% cap apparently refers to a bracket of taxable income, which includes itemized deductions.

WSJ: Tax Report: Is Taxing Health Plans Next?

The marginal tax rate is the rate paid on the taxable income, in the highest tax bracket.

FORBES: Countries With The Highest And Lowest Taxes

While the write-off would make no difference to a tax-exempt investor, a taxable investor in the 30% tax bracket would get an after-tax income stream comparable to another REIT yielding 7.14%, a substantial difference.

FORBES: Norfolk Southern v. Power REIT: Worst Case is Much Better Than Nothing

For example, a tax-free yield of 3% would be the equivalent of a 4.6% taxable yield for someone in the 35% bracket, and 4.97% for someone in the 39.6% bracket.

WSJ: Conquering Retirement: The Case for Muni Bonds

Expiration of the 10 percent tax bracket will raise taxes on everyone with taxable income.

FORBES: Marginal Tax Rates Matter More Than Average Tax Rates

Assume you are in a 50% tax bracket and destined to earn 8% a year, all currently taxable, from your investment.

FORBES: The tuition estate trick

The conventional approach is to compare your current tax bracket with what you think it will be in retirement, which would depend on your taxable income and the tax rates in place when you retire.

FORBES: Why the Pre-Tax v. Roth Decision is More Complex Than It Seems

For a taxpayer in the top federal bracket of 35%, a 3% dividend yield is equivalent to a 4% yield on a taxable bond.

FORBES: When Patience Pays