For financiers growing worried that President Joe Biden will transfer to raise levies on financial investment gains, CNBC’s Jim Cramer on Tuesday used a technique to prevent the possibly greater tax tailored towards the rich.
“If you’re worried about Biden’s plan to raise taxes on capital gains but not dividend income, well that’s not a reason to sell everything,” the “Mad Money” host stated. “It’s a reason to buy dividend stocks.”
Biden might pitch the modification, which would end the tax-favored status of capital gains for millionaires, as quickly as today. As reported, the proposition consists of treking the tax to 39.6% from 20%. The rate might strike 43.4% for the wealthiest taxpayers.
“If the capital gains rate goes up to 39.6% and the dividend rate stays the same at 20%, that instantly makes dividend stocks a heck of a lot more attractive,” Cramer stated.
“Biden’s plan would create a world where every dollar of dividend income is worth $1.32 of capital gains,” he included. “As long as lots of rich investors are worried about this tax hike, you have to expect that the investors who want to pay lower taxes will start swapping into dividend stocks.”
Cramer backed the following 10 high-yielding stocks with the “best stories”:
Disclosure: Cramer’s charitable trust owns shares of Crown Castle.
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