A new poll from Gallup (chart below) confirms that consumers who make more than $90,000 account for practically all of the periodic variation in consumer spending.
Upper-income Americans’ self-reported spending averages about $120 per day – about twice the spending level of those making less than $90,000.
Note that lower income spending is practically flatlined at $60 per day. Makes sense since most of the spending is on necessities (or at least I hope so).
But, upper income spending ranges plus or minus 20% – from about $100 per day when times are perceived to be tougher, to $145 per day when optimism reigns.
Couple of implications …
These days, gov’t programs (e,g, via Obama’s dollar-a-day “make work pay” tax rebate) don’t move the needle on lower income spending … not even the dollar-a-day seems to flow through.
Higher taxes on the wealthy drive them to the lower limit of their spending ($100 per day) … from their higher limit ($145 per day).
Impact on the recovery? Draw your own conclusion …
Source article: WSJ, Wealthy Are the Only Ones Spending, June 11, 2010
http://blogs.wsj.com/economics/2010/06/10/wealthy-are-the-only-ones-spending/
The Homa Files 
June 16, 2010 at 10:37 am |
If that is not enough, the states with higher taxes are seeing their higher earners leave too. Forbes has it mapped out:http://www.forbes.com/2010/06/14/where-the-rich-are-moving-business-beltway-rich-migration.html?boxes=Homepagemostpopular#