Why the 1% Don't Know They're the 1%

A Reversal From Just Five Years Ago: People Are Feeling Poorer, Not Richer

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Here are two things you might not know about the 1%, those super-affluent puppet masters who are targeted by Occupy Wall Street and Democrats alike: There are more of them than most people assume, and the majority of them aren't exactly sweating the presidential election.

In fact, a lot of people don't even realize they're in the 1%. When Ipsos Mendelsohn earlier this year asked the merely affluent -- Americans in households with incomes of $100,000 or more -- who was in the 1%, on average they said it would take about $1.4 million to get there. But government estimates put the dividing line much lower, at $325,000 in household income.

Looked at alternately, even the lowliest Major League Baseball rookie making the $480,000 minimum last year was well within the 1%. It took only four days of A-Rod's salary to enter the 1%.

And while they've been all but tarred and feathered by one political party and sweet-talked by the other, the 1% -- or the almost 1% -- seem remarkably sanguine about a presidential election that 's been hard to escape.

Steve Kraus, chief insights officer in the Audience Measurement Group at IpsosCT, said recent Mendelsohn surveys show that even people making $250,000 -- the dividing line frequently used by President Barack Obama and Democrats to mark where tax increases should hit -- aren't that worried about how the election's outcome will affect them.

Mendelsohn doesn't break out the top 1%. But it does segment its monthly surveys into the merely affluent and "ultra-affluents," those who make $250,000 or more and are actually in the top 2% to 3% range of Americans, Mr. Kraus said. And the ultra-affluents aren't all that worried about who wins.

In survey results released in August, 49% of respondents said they don't expect their saving or investment plans to change in 2013 no matter who wins the presidential election. Another 14% actually said they plan to spend or invest more if Mr. Obama wins, though a much larger 37% said they will spend or invest more if Mitt Romney wins.

A substantial 55% of ultra-affluents do expect to pay higher taxes if Mr. Obama is reelected, but 24% expect to do so even if Mr. Romney wins. And 27% don't expect the election to make a difference.

Of course, one thing that could skew perceptions is that people don't tend to think they're as rich as they really are these days. Mr. Kraus said the affluent -- in households that are in the top 20% to 25% of earners -- on average think they're in the 38th percentile. The ultra-affluent in the top 2% to 3% of earners on average think they're in the 16th percentile.

"That's a big difference from 2006 or 2007, when everyone kind of overestimated how wealthy they were, or at least they felt like they were going to get rich, so started spending according to their perceptions," Mr. Kraus said. "Today I think it's more the opposite pattern."

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