More On Tax Planningfrom The Advisor's Professional Library
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
- Long Term Care Insurance: Premiums While premiums for qualified long-term-care insurance may be deductible as medical expenses there are exceptions to this general rule. Learn how to avoid unnecessary tax liabilities.
A new study adds fuel to the fire over the impact of higher taxes on discretionary spending.
The study, conducted by the American Affluence Research Center, finds most affluent consumers will maintain spending levels despite expecting lower income due to higher taxes. It defines the affluent as the wealthiest 10% of U.S. households, which it notes accounts for almost half of all consumer spending.
While mildly optimistic in their outlook for business conditions and the stock market, the affluent consumers seem to be more positive than the general public, as evidenced by volatility and declines in the Gallup weekly Economic Confidence surveys in March and the Conference Board’s Consumer Confidence Index for March. The Spectrem affluent consumer research in March was generally consistent with the March survey of the American Affluence Research Center.
Key findings from the Spring 2013 Affluent Market Tracking Study include the following:
—80% own one or more mobile devices (smart phone and/or tablet).
—iPhone is named more than twice as often as the combined total of Android, BlackBerry and others.
—iPad is named more than five times more than the combined total of Android and other tablets.
—More than half own two or more mobile devices.
—Among the 72% who participate in social media for any reason, Facebook is a slight favorite.
—Less than half of social media participants subscribe to receive communications from a company.
—Online purchases of 15 listed products is higher than in a 2003 survey, though online research of the same products is relatively unchanged or down.
Expected changes in income and net worth during the next 12 months “clearly influence and correlate with spending plans,” according to the study. For example, the average index for changes in spending is about 20% higher among those expecting no decline in income or net worth as compared to those expecting a decline.
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