How to Invest for a Higher-Tax Future

Use these strategies to boost your after-tax returns.

picture of Uncle Sam taking money out of a man's wallet
(Image credit: Getty Images)

We all know what they say about the certainty of taxes. And this year, it’s a good bet that some taxes on investment income will rise—the biggest uncertainty is by how much. That makes now a good time to review some tax-wise investing strategies.

President Biden’s American Families Plan proposes to nearly double the long-term capital gains tax for the wealthiest taxpayers, from 20% to 39.6%. Add the 3.8% net investment income tax that certain high-earning investors must pay, and the top capital gains rate would rise to 43.4%. The plan is merely a proposal, of course; the final rate may land closer to 24% to 28%, say some experts.

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Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.