TAXED TO THE MAX: Waiting to See How the Put-Upon Rich Behave

The rich, we’re told, are different from the rest of us. But will they be less different as they adjust to the Clinton Administration’s stiffer taxes on high incomes? Or even more different? A recent piece in the business section of The New York Times offered speculation by various economists as to how the rich will adjust their behavior (if at all) in response to the sharp increase in their marginal tax rates. Some economists said they expect the working rich to work less – hence, to enjoy greater leisure (which isn’t taxed) instead of seeking more money (which is). If that happens, the still-pretty-rich will be open to the blandishments of upscale marketers who help them enjoy their new-found free time. But other economists suggest the rich may strive even harder to keep their purchasing power at its pre-tax-rise level. If that’s so, the wealthy but weary will be more receptive than ever to marketers who pamper them with luxuries and time-saving services. Either way, just as the bold rich of the ’80s boom and the circumspect rich of the ’90s recession each posed their own challenges to marketers, so will the put-upon rich of the Clinton years.
Copyright Adweek L.P. (1993)