Much has been made of the possibility of higher taxes on the wealthiest among us next year. But what will be the tax rate on investment income—interest, dividends and capital gains—for taxpayers who aren't in the top brackets?

Ken Lange, a Wall Street Journal reader living in Phoenix, wants to know. "I'm a retired small investor who depends on dividends and Social Security," he says, "so the answer matters."

Mr. Lange isn't alone. Many affluent and even wealthy investors aren't in the top brackets. Some have substantial income from municipal bonds or Roth individual retirement accounts that keeps taxable income low, while others are business owners with variable income. Still others are spending savings now so that IRAs can expand before they take payouts.

Lawmakers have postponed deciding next year's rates until after Nov. 15. Given other legislative matters and their Thanksgiving break, the Senate may not tackle taxes until early December or even later.

The good news for investors who aren't in the top brackets is that the worst outcome is also the least likely: total expiration of the Bush 2001 and 2003 tax cuts. This probably won't happen because investment-tax rates are tied to income-tax brackets, so total expiration would drastically raise levies on all low- and middle-income taxpayers, not just investors. The political backlash would be intense.

More likely: Lawmakers will either extend the Bush tax cuts for all taxpayers, or else go with President Obama's plan to extend the cuts only for couples making less than $250,000 ($200,000 single). These two plans are similar for investors in lower tax brackets, except for a little noticed quirk: Some people in the $225,000 range would pay less under the Obama plan than the Bush plan.

Here is how all three plans would tax income from interest, dividends and capital gains. The table below gives 2011 income tax brackets for all three plans as projected by Jim Young, head of the accountancy department at Northern Illinois University in DeKalb.

• Taxable interest. All of the proposals would continue to tax interest from corporate bonds, CDs and the like at ordinary income rates. But note that joint filers with taxable income between $212,000 and $235,000 would pay at a top rate of 28% under the Obama budget, but at 33% if all the Bush cuts are extended.

• Long-term capital gains. These are generally those held longer than a year. Both the Obama plan and extension of the Bush tax cuts have a zero rate on capital gains for those in the 15% bracket and below, which means that couples with taxable income under about $70,000 would owe nothing on their capital gains.

Above that they differ. Extension of the Bush cuts for all would tax capital gains at 15% for those in the top four brackets, while the Obama plan gives a 15% rate only to investors in the 25% and 28% brackets (between about $70,000 and $235,000). Joint filers with taxable income above $235,000 would pay at a 20% rate.

In the unlikely event that the Bush tax cuts expire, the capital-gains rate in January would be 10% for taxpayers in the lowest bracket (up to $58,000) and 20% for those in brackets above. For sales of assets held longer than five years, taxpayers get to subtract two percentage points from their tax rate.

• Dividends. These payouts are the tax wild card of 2011. Expiration of the Bush cuts would significantly raise taxes on them by again classifying them as ordinary income. For a couple with about $58,000 of taxable income, the dividend rate would jump to 28% from zero, says Prof. Young.

Assuming that doesn't happen, the good news for lower-bracket investors is that both President Obama's plan and extension of the Bush cuts keeps qualified dividends in the same tax category as capital gains. In other words, there would be a zero rate up to about $70,000 for joint filers.

Above that, the Bush plan maintains a 15% rate for all, while the Obama plan gives a 15% rate only to those with taxable income between about $70,000 and $235,000, and jumps to 20% above that.

Write to Laura Saunders at