Investors in high-tax states like New York and California reportedly are flocking to municipal bonds this year, fueled in part by the 2017 tax overhaul that raised tax burdens for some high-income households.

The purchases are driven by taxpayers’ desire to generate tax-free income, and this year’s buying surge started right as taxpayers were seeing the full impact of the new law, The Wall Street Journal explained.

Mutual and exchange-traded funds containing California, New York and New Jersey munis have received a combined total of $6.5 billion in inflows through the end of July, the most of any seven-month period since at least 2014, WSJ.com reported, citing Lipper.

“High-income taxpayers oftentimes were a little bit taken aback by the fact that their tax bills either stayed pretty flat or maybe their aggregate tax bill increased. And that always raises a question of: What can I do about this?” Suzanne Shier, chief tax strategist for wealth management at Northern Trust Corp., told the Journal.

Meanwhile, Forbes.com explains that if you do choose to invest in muni bonds, you just may be boosting the overall health of the community.

Municipal bonds fund new facilities and renovations or expansions providing major health care upgrades to a community, Forbes.com explained.

"Another contribution to good health in a community is access to vibrant cultural and social venues as well as open space for recreational opportunities," Forbes explained. "Cities, towns and counties are increasingly turning to municipal bonds to fund open space of this kind: in 2018 there were 33 ballot measures to approve issuing municipal bonds to fund a variety of open space measures. In a strong plurality, voters in 18 states approved 31 of the measures, green-lighting an expected $7,973 million in bond issuance for open space initiatives."

Meanwhile, Senator Ted Cruz is pressuring Treasury Secretary Steven Mnuchin to quickly deliver a tax cut to investors by indexing capital gains to inflation, a move that he said would encourage savings, investment and innovation, Bloomberg explained.

Cruz, along with 20 other Senate Republicans, are sending a letter to Mnuchin on Monday urging him to index the tax on gains made from real estate, stocks or bonds so investors would pay less when selling an asset than they would under existing law.

Current “treatment punishes taxpayers for the mere existence of inflation and is inherently unfair,” the letter said. “Other tax provisions such as individual tax brackets are rightly adjusted for inflation annually. Capital gains ought to receive the same treatment.”

Cruz and the other GOP senators argue that Mnuchin has authority to make the change through regulation without involving Congress, though previous administrations have concluded that can’t be done. The effort comes as President Donald Trump is looking for issues to win favor with voters and donors during his 2020 re-election campaign. Democrats in the House and Republicans in the Senate are unlikely to agree on any tax cut legislation in the coming months.

Mnuchin, so far, has been hesitant to making the change, which Trump’s other top economic advisers support. National Economic Council Director Larry Kudlow has championed the idea for years.