A "taxable bond" is a type of debt security where any return earned by the investor will be subject to taxation. In terms of tax treatment, a "taxable bond" is the opposite of a tax-exempt government bond. Taxable bonds are often issued by corporations as a way to raise cash by taking on debt, rather than by selling stock and thereby diluting ownership interests in the process. The degree of risk depends on the financial stability of the company issuing the bonds. The degree of risk for taxable bonds is generally higher than risks associated with tax-exempt government bonds but the returns are potentially greater as well.