NCPA - National Center for Policy Analysis

Investors Come In All Sizes

August 8, 2000

One of the more phenomenal events of the past decade has been the enthusiasm of Americans for stocks and other investments. The popularity of "being in the market" has spread through all income levels. And that has all but demolished class-warfare rhetoric, if not all class-warfare political policies.

  • From 1989 to 1998, the proportion of U.S. households owning stocks increased from less than one-third to nearly one-half.
  • The proportion of shareholders in households making less than $10,000 a year grew from nearly zero in 1989 to nearly 8 percent in 1998.
  • In the $10,000 to $24,999 bracket, the share jumped from less than 15 percent to nearly 25 percent.

The policy implications are enormous. Voters are discounting arguments designed to stoke envy of the rich and, instead, seeking to become wealthy themselves. Nowhere has this switch been more evident than in the debate over the death tax. Precious few voters and wage earners are susceptible to it. But in overwhelming numbers, they see estate taxes as unfair to the rich and they support its abolition.

Furthermore, with the number of individual investors now around 80 million, support for cutting capital gains levies -- or even eventually abolishing them -- has been growing.

Source: Editorial, "Clout of the Investor Class," Investor's Business Daily, August 8, 2000.


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