Tax Anticipation Bill - TAB

TABs...tax anticipation bills...are a thing of the past. A time when pointy collars, bell bottoms, and ponchos were all the rage. Yep, the 1970s.

A tax anticipation bill, or TAB, was a short-term debt obligation backed and sold by the U.S. Treasury. TAB buyers would get interest payments for the life of the bond, and the principal repayment upon the maturity date...nothing surprising there. Pretty similar to your regular T-bonds, except that denominations were often in the $10k range, so they were more corporate investments than personal ones.

You can consider a TAB a tax-desperation measure, since the government only sold TABs when they didn’t have enough taxes to cover short-term government spending costs. A bit embarrassing if you ask us...but you gotta do what you gotta do, gov'ment.

TABs’ timelines usually aligned with corporate tax payment dates, since filling in those in-between times with some cash was their purpose.

The modern TABs are cash management bills, which are sold by the Treasury nowadays to cover short-term funding gaps.