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Rich Worry More About Deficit Than About Taxes

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NU Online News Service, Jan. 26, 2004, 4:07 p.m. EST – Many rich U.S. residents agree that the economy is improving, but some worry about the return of federal budget deficits.[@@]

Researchers from Penn, Schoen & Berland Associates, New York, are basing those conclusions on the results of the latest survey in a quarterly survey series sponsored by the McDonald Financial Group, Cleveland. For the survey conducted in early January, the researchers interviewed 400 U.S. residents who had at least $500,000 in investable assets or annual incomes of at least $150,000.

McDonald’s January confidence index for affluent consumers is 56, up from an initial index of 41 recorded a year earlier, McDonald reports.

The index is set up so that scores over 50 indicate optimism and scores under 50 indicate pessimism.

Earlier this month, 61% of survey participants said the economy would get better in the next 3 months, up from only 39% in January 2003. The percentage of survey participants who said their family’s own economic situation had improved over the past 3 months increased to 40%, from 14% a year earlier.

But 50% of the participants said there is a real estate bubble. Half of the participants also said there was a real estate bubble in January 2003.

When asked about the federal budget deficit, 80% of the participants said they were “very concerned” or “somewhat concerned,” and 59% said reducing the deficit should be the domestic economic issue that gets the most attention during the 2004 election season. Only 39% said candidates should focus on cutting taxes.

McDonald Financial is a unit of KeyCorp, Cleveland.