Investors worry less about the eocnomy, but more about the federal deficit and taxes
Main Street America is growing less concerned about the economy, but more worried about the federal deficit and the potential for tax increases, according to data released in May by Spectrem Group.
“Affluent investors see that the economy has stabilized, but they don’t believe we’re out of the woods,” said Catherine McBreen, Spectrem’s managing director. “Concerns have shifted to the federal deficit and the prospect of paying more in taxes.”
A bitterly divided Congress has been debating whether to raise the national debt limit beyond its current $14.3 trillion ceiling. At risk is the nation’s ability to repay its debts. A recent student by The Pew Charitable Trusts revealed that more Americans (48 percent) worry about increased government spending than the prospect of the U.S. going into default (35 percent). The gap is even wider among Republicans (60 percent vs. 25 percent).
Mass Affluent investors are expressing growing concern over the national debt. (Spectrem defines these investors as having a net worth of $100,000 to $1 million, not including primary residence.) In April, 73 percent of the Mass Affluent expressed concern over the federal deficit, compared to 71 percent in December.
Growing worries over tax increases accompany fears over the federal deficit. Seventy percent of the Mass Affluent surveyed in April say they worry about tax hikes, up from 50 percent in December 2010.
The prolonged economic downtown remains the top concern of the non-Millionaire wealthy, but concern over the economy is subsiding. More than 80 percent said they were concerned about the economy in 2008, but that number has dropped to 74 percent.