In times of economic instability, wealth is often an object that becomes politicized.
Under Trump 2.0, it means discussions about who should be taxed and how much, What represents “rich”, and how this private capital is mobilized to solve public finance problems.
“One, large, large, beautiful account,” after the assessment of the Congress Budget Office (CBO), they discovered that policies would cost the poorest Americans approximately 1,600 dollars a year Revenues of the richest households On average $ 12,000 a year.
This is the kindness of policy setting, such as increased release threshold for estimates and gifts to $ 15 million, as well as a change in CAP deductions for State and Local Taxes (SOL) from 10,000 to $ 40,000.
One question with current debates on wealth taxes, says UBS chief economist Paul Donovan, whether the rich voters of America do not realize that they are rich.
Speaking at the round table last week, Donovan explained: “A pretty interesting question that we become more and more in conversations … about things like taxes and inheritance taxes is that there is more and more gap between the perception of wealth and the reality of wealth.
“So, people will say,” Yes, we need to do the wealth tax millionaires, but not me, I don’t count as a millionaire “When you actually own a two bedroom apartment in Manhattan. You are definition, millionaire.”
Donovan continued that social media also distort wealth. Even if the inequality of wealth has not changed, he said people feel worse due to extravagance shared online.
“As a result, people may be more confused between their perception of their wealth and the reality of their wealth,” Donovan added.
“Many people are rich, but they perceive themselves as somehow unfavorable because they do not live the best life of social media.”
Luxury shame
With Wealth is becoming more and more camping themselves socially– With even good to distinguishing from reality your situation – consumers are already suppressing their status symbols and experiences.
Bain & Co. are Spring update of the luxury sectorPublished last week, it shows that the industry specially decreased.
Claudia d’arpizio, one of the authors of the reportspeak Happiness The phrase ‘luxury shame’ first made up during the financial crisis in 2008. year when the wealth was experienced as Gauche given to millions of Americans who lost their homes and jobs.
D’arpizio added that luxury stores wide storage of white paper bags to send consumers with purchases, because individuals did not want to see themselves with design carriers.
“In the US, it was confident; people corrected their behavior because they were ashamed,” D’arpizio continued. The trend is now, led by Chinese consumers, government.
She explained: “This is a communist regime that has been pushed by luxurious consumption in the last 15 years when people became richer and richer. There are unemployment at younger generations, so they try to keep the rich at this time.”
This social tension spreads west, D’arpizio added, which means that luxury brands focus less on the perception of elites and more about what the bastion of culture and innovation are.
Rich become richer
It is said, just because wealth or does not want or not realize that they are rich, it does not mean that the motors who create their property move any slower.
“There are two independent drivers we need to consider, which do not affect the growth growth mover,” Donovan said in response to the question Happiness. “The first of them is the rise of economic nationalism.”
We only need to look at Trump’s American-first initiative, but Donovan added that behavior also was widespread in nations like China.
He added “often there may be hostility towards foreign brands, according to foreign companies. It must be something that we have seen, for example, with European luxury brands in China.”
Donovan added that the second factor that shapes a rich approach to consumption is that their focus is smaller on goods and more at the party.
“The question I have often asked is: What is an economist mean to have fun? The answer is all you can ask about it Instagram“” Donovan speaks fortune. “It means a foreign journey, it’s Taylor Swift Concerts. To be fair, it’s also clothes, because obviously, if your latest meal is installed, you need to do it in the new clothes.
“These trends that are independent of the entire creation of wealth … We have in factor, because I can make a shame on wealth when in real fact simply changes spending patterns for other reasons.”
