Much controversy surrounded the recent extension of income tax breaks for the wealthy, but Americans in the top tax brackets seem to have regained a great deal of economic optimism since Congress and President Obama confirmed their extension back in December. That confidence, it seems, has also trickled down to those in lower tax brackets.
According to weekly trend data from Experian Simmons, 35.5% of all U.S. adults now believe that in the coming 12 months they will be financially better off than they are today. That’s up from 30.7% who felt this way as of November 8, 2010, a relative increase of almost 16%.
High income Americans, however, have even greater levels of economic confidence — and it’s still on the rise. As of February 7, 2011 (the latest date for which data was available at the time of this post), fully 47% of Americans with annual household incomes of $100,000 or more believed that they would be better off financially in the coming year, up from just 33% on November 8, 2010.
Furthermore, Americans with annual household incomes of $250,000 or more are twice as confident today that their finances will improve during the coming year as they were before the tax breaks were extended — tax breaks that disproportionately affected this same group of people. As of February 7, 2011, 57% of adults in this bracket believe they will be even better off financially a year from now, up from just 26.2% who felt confident on November 8, 2010.
This optimism has caught on with Americans in lower income brackets with those earning between $50,000 and $99,999 annually reporting a relative seven percent increase in optimism between November 8, 2010 and February 7, 2011. Currently, 37% of adults in this group believe they will be better off financially in the coming year. Likewise, Americans with annual household income between $25,000 and $49,999 have seen their confidence levels rise to 33% as of February 7, up from 31% on November 8, a relative increase of six percent.
Americans with annual household incomes of $250,000 or more are twice as confident today that their finances will improve during the coming year as they were before the tax breaks were extended.
Interestingly, those with annual household income less than $25,000 saw their confidence rise a relative 14% since November 8, 2010. Currently, 31% of Americans in this income bracket report feeling a sense of optimism about their financial situation in the coming year, up from just 28% who felt this way in November.
For more consumer insights, download the 2010 U.S. Household Consumer Trend and Benchmark Report, which includes trends on use of digital coupons, charitable contributions and planned automobile purchases.