In case anyone is reading this far down. You said: "SGOV dividends are largely federal tax exempt since it's 90%+ treasuries."
Now you posted a link that said the opposite.
I'll concede that states might not tax the dividends of SGOV. CA appears not to. https://old.reddit.com/r/tax/comments/1194lbk/treatment_of_treasury_income_in_etf_for_state/
Other states might. ChatGPT-4 thinks they do, but could be hallucinating.
In any case, in order of tax advantage, for high earnings, it's pretty clearly:
BOXX > SGOV > Bank interest
No. SGOV dividends (as well as treasuries) are taxed as ordinary income at a rate of up to 40.8%.
Add in state taxes, and you're paying nearly half of your already paltry income.It's a very bad deal.BOXX is taxed as capital gains and only when you sell. If you hold for a year, the maximum rate is 23.8%. Note that this is a somewhat novel product so there might be ruling against it in the future, but in theory it works.
Perhaps you are confusing SGOV for a muni, which is generally not taxed at the federal level. These have other downsides, such as higher risk and lower yields.
In any case, lending money to the government is a pretty awful deal. They dilute you constantly and charge you extortive taxes for the privilege. In the end you're much better off owning a shiny rock (might write a post about this later).
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