Higher taxes can spell hardship for investors living on a fixed income. When do retirees feel a tax increase is acceptable?
Inflation and tax increases threaten the security of investors living on a fixed income, yet many retirees would be willing to pay higher taxes in the current economic environment – but only under certain conditions, according to the latest research from Millionaire Corner.
In fact, retirees participating in our July survey of more than 1,400 investors expressed a greater willingness to pay higher taxes to support federal programs and reduce the deficit than did investors still in the workforce.
One-third of retirees agreed that a tax increase would be acceptable at this time if “the government makes a corresponding spending cut.” (Less than 30 percent of working investors feel this way.) One-third of retired investors would also accept a tax increase used to offset the federal deficit, in comparison with roughly 30 percent of working Americans.
Social service programs also appear to be dearer to the hearts of retired investors. Nearly one-third said a tax increase would be acceptable to prevent cuts to social service spending, compared to less than one-fourth of working Americans.
Retirees also would be more willing than working Americans to support education programs through higher taxes, 29 percent vs. 26 percent, respectively. More than 13 percent of retirees, compared to 9 percent of working Americans, would accept higher taxes to prevent cuts to military spending.
Not all retirees would support higher taxes. More than 36 percent feel a tax increase would not be acceptable under current economic conditions, a sentiment shared by an even higher percentage of working Americans (38 percent).
Retirees appear to be more concerned about general inflation and the rising costs of health care, than they are about taxes, according to an earlier Millionaire Corner survey. Our research also indicates that many older Americans remain in the work force because they fear running out of money in retirement.