Survey Reveals Millionaires Want Higher Taxes to Fix Inequality
CNBC Wealth Editor Robert Frank Reports for CNBC Business Day Programming and CNBC.com
ENGLEWOOD CLIFFS, N.J, May 6, 2014 – CNBC, First in Business Worldwide, today announced the CNBC Millionaire Survey, a semi-annual survey that provides summaries of the investment attitudes and behaviors of investors with $1 million or more of investable assets. The research was conducted by the Spectrem Group in March 2014 utilizing an online panel representative of the affluent population in the United States.
CNBC Wealth Editor Robert Frank will lead the coverage of the survey findings during CNBC's Business Day programming and on CNBC.com.
According to the CNBC Millionaire Survey, most American millionaires believe inequality is a "major problem" for the U.S. And nearly two thirds of those who say inequality is a problem support higher taxes on the wealthy and a higher minimum wage as ways to narrow the wealth gap.
The findings show that, far from being a purely self-interested voting bloc, American millionaires have complicated views when it comes to the wealth gap and opportunity in America. They are unashamed of their own wealth and attribute their success to hard work, smart investing and savings. They also believe that anyone in America can get wealthy if they work hard.
Yet, millionaires also believe that cultural and family issues prevent many Americans from climbing the wealth ladder. They advocate improved education, higher taxes on the wealthy and better savings incentives for the poor and middle class as important changes that would reduce inequality.
The CNBC Millionaire Survey polled more than 500 people with investible assets of $1 million or more, which represents the top 8% of American households. The respondents came from around the country and were split between Democrats, Republicans and Independents.
When asked about the number one factor in obtaining their wealth, the millionaires ranked hard work first (23%), followed by smart investing (21%) and savings (18%). Education ranked fourth, at 10%, followed by frugality and then inheritance. Only 1% cited luck as the top reason for their wealth.
Multi-millionaires, or people worth $5 million or more, were more likely to cite "running my own business" as their top wealth factor. Women were three times more likely to cite inheritance as their top wealth factor (15% vs. 5% for men), and men were more likely to cite savings (20% versus 14% for women).
Most millionaires still believe in the American dream. Fully 94% said the American dream is still achievable. When asked to define that dream, the largest number (45%) said the American dream is "prosperity and upward mobility through hard work." Only 18% defined it as "spiritual and temporal happiness more than material goods." Multi-millionaires, however, were far more likely to define the dream as material rather than spiritual (63% versus 4%).
Despite being winners in the new economy, U.S. millionaires view inequality as a problem. More than half of millionaires and multi-millionaires agreed that "inequality of wealth in our nation is a major problem."
Yet they don't see themselves as a cause. Fully 81% said they don't feel embarrassed by their wealth "because I earned it" and only 5% said they feel a sense of guilt about the wealth they possess. More than half said anyone in the U.S. can become wealthy if they work hard.
When asked about the reasons for inequality, 78% of millionaires who say inequality is a problem said the wealthy have greater access to education. Two thirds cited the "lack of financial literacy" that prevents poor households from making better financial decisions.
More than half of millionaires who say inequality is a problem said cultural issues and broken families also prevent people from attaining wealth. Only 6% said that people worth less do not work as hard as those with wealth.
The best way to reduce inequality, millionaires say, is through improved education. 83% of millionaires who say inequality is a problem supported an increase in educational opportunities for the less wealthy. An equal number (64%) supported better savings incentives for the less wealthy and "higher taxes for the wealthy."
Perhaps surprisingly, a majority (63%) also support a minimum wage. Only 13% supported reducing unemployment as a solution to inequality.
A millionaire's view on inequality and taxes, however, seems to depend more on their politics than their wealth. Fully 86% of Democratic millionaires said inequality is a problem, compared to only 20% of Republicans. Two thirds of Republicans – versus a quarter of Democrats -- say anyone can become wealthy in America if they work hard.
Democratic millionaires are far more supportive of taxing the rich and raising the minimum wage. Among Democratic millionaires who say inequality is a problem, 78% support higher taxes on the wealthy and 77% back a higher minimum wage. That compares with 31% and 38% respectively among the much smaller number of Republicans who say inequality is a problem.
Politics even plays a role in how millionaires view wealth creation. Among Republican millionaires, 63% say hard work is the number one reason the wealthy are wealthy. Democrats were most likely (45%) to cite a person's family or place of birth as the top reason for their wealth.
So, American millionaires in general agree that inequality is a problem. But when it comes to solutions, millionaires are just as split along political lines as the rest of the country.
For more information, go to: http://www.cnbc.com/id/101634240.
The CNBC Millionaire Survey is the latest edition to CNBC's growing portfolio of proprietary research capturing economic sentiment from Main Street to Wall Street to the C-Suite including the CNBC All-America Economic Survey, the CNBC Fed Survey, the CNBC Global CFO Council and the CNBC Digital Financial Advisor Council.
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