Unless you're in the highest tax bracket, usually taxable bonds still have a higher after tax yield. State taxes can factor into that and some single state muni funds exist to help with that. However, there is something to be said about corporate bonds vs. municipalities in regards to safety.
Probably your best route is to own taxable bonds in your tax advantaged account. Bonds throw off taxable income. Withdrawals from tax advantaged accounts are treated as income. So you come out equal. Most of the returns from equities are due to capital gains. Capital gains are taxed less than income. But all capital gains in a tax advantaged account will be taxed as income at the higher rate. So it's better to make room for your bond holdings in a tax advantaged account and hold equities in a taxable account.
If you do choose to own a muni bond fund, VWIUX is an excellent fund.
