What are "tax-favored investments"?

What are "tax-favored investments"?

John Stoller, CPA (Certified Public Accountant) gives expert video advice on: What are "income taxes"?; What is the "IRS"?; What are "tax-favored investments"? and more...

An obvious one is municipal bond interest. The federal government doesn't tax interest paid by cities and states. If you have enough money you can invest it in what they call "munies" and not pay any federal tax on it. If you invest it in bonds from the state where you live in, there won't be any state tax on it either.