A tax free investment will always have a higher after-tax return than a taxable investment.

Question

Quizplus · Accepted Answer

The after-tax return of an investment depends on various factors including the tax rate, the investment's return rate, and the nature of the investment (capital gains vs. interest income, for example). A tax-free investment might not always outperform a taxable investment, especially if the taxable investment has a significantly higher pre-tax return.

A Tax Free Investment Will Always Have a Higher After-Tax