UBS's Paul Donovan emphasizes that many affluent Americans fail to recognize their wealth, complicating discussions around wealth taxes. This disconnect is exacerbated by social media, leading to what Claudia D'Arpizio from Bain & Co terms 'luxury shame', as consumers downplay conspicuous purchases. Amid economic uncertainty, policies surrounding wealth and taxation are increasingly politicized, with the debate centered on the definition of wealth and the impact on lower-income individuals, as new policies shift tax burdens affecting the rich and poor differently.
A rather interesting issue that we're starting to see come up more and more in discussions ... about things like wealth taxes and inheritance taxes is that increasingly there is a gap between the perception of wealth and the reality of wealth.
Luxury brands need to shift focus from elitism to culture and innovation as social pressures mount, with consumers curbing visible status purchases reflecting a rise in 'luxury shame'.
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