Great Question:
I, Personally, think it depends upon what you plan on doing with the money. If you're going to invest in index funds or ETF's and hold for the long period, I see no point in using the SEP IRA option. First, I'd consider switching from the fund to the ETF, as these are often more tax efficient, as they will give very very few distributions; if any. Furthermore, if you use a SEP IRA you are going to save on income tax, but you will have to pay full income tax on distributions from the account when you withdraw. If you invest in stock ETFs then you would pay capital gains tax rates on your gains and dividends... There may be a small advantage to the SEP IRA in this case, but you've locked yourself into an illiquid position where you cannot draw from the account without penalty until the age of 59 1/2. Personally, I wouldn't bother with this option...
Then again - lets say you're going to invest in bonds: You put the money into the SEP IRA and it grows tax deferred for many years and basically is able to compound. If you do this in a cash account, you pay income tax every year on the yield, severely limiting or eliminating any growth of capital. Hands down, the SEP IRA is a the better way to go.
REITS I'd lean towards SEP IRA
Obviously, you'd have muni bonds in a taxable account...
Just my opinion on the matter... Clearly, your age and strategy will dictate your course of action.