Tax Considerations for Municipal vs. Corporate Bonds

Maria is a financial planner working with her client, Tom, a retired high-net-worth individual. Tom is keen to understand the tax implications of various investment choices available to him, given his current tax bracket. He's particularly interested in knowing the potential tax benefits of investing in municipal bonds versus regular corporate bonds.

Maria explains that municipal bonds are typically exempt from federal income tax and possibly state taxes, making them an attractive option for individuals in higher tax brackets. In contrast, corporate bonds are subject to regular income tax, which can affect the overall yield that Tom receives from these investments. With this context in mind, which option best describes the primary tax consideration Tom should focus on regarding these two investment types?