Wealthy Are Spending

Physician's Money Digest, November15 2003, Volume 10, Issue 21

Under the new tax law, taxpayers withpretax incomes of $200,000 and up got atax break that averaged between $5000and $93,000. Critics of the Bush tax cutsharped on these benefits to high-incometaxpayers and theorized that the cutswouldn't have much effect on spending bythe affluent. Economic data, however,suggest that spending by the well-to-do isthe primary drive behind a 6.1% annualincrease in consumer spending betweenFebruary and August of this year, a periodthat closely links the hike in spending tothe president's tax cuts. Benefitting fromthe affluent consumers' willingness toloosen the purse strings are industries thathave been hit hard by the recession andthe September 11 attacks, including entertainmentand travel. Sales of luxury carsand high-end household electronics arealso up, with the wealthy placing moreconfidence in an economic rebound.