Nearly all developed countries have higher personal savings rates among their citizens.
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
34% of Americans have zero in savings accounts. And lest you think it must be a lower-class phenomenon, 44% of Americans making between $100,000 and $150,000 a year have less than $1000 in savings. Many blame credit cards, with some justification; it's one thing to just whip out the plastic, but quite another to open your wallet and pay for that purchase in cold, hard cash.
But that's hardly the whole story: back in the 1980s, Oregon Senator Bob Packwood chaired a committee that rewrote the federal tax code. And what did Packwood and his pals do?
Well, for starters, they took away deductions formerly enjoyed by the middle class: no longer could taxpayers deduct interest paid on loans - including credit card interest. Fuel taxes paid were no longer deductible, and a whole host of other formerly deductible expenses suddenly weren't. Interest earned on savings accounts was suddenly treated as taxable income, even though the whole idea behind having a savings account was to leave the cash in there and watch the account balance grow.
More than anything else, that action eliminated the incentive for Americans to establish and contribute to savings accounts.
Your government at work.
And now they have the unmitigated audacity to wring their collectivist hands and whine that Americans aren't saving. Packwood even bragged about the rewritten tax code, bizarrely claiming that he'd "worked hard to put more money in your jeans" in his campaign ads. No, he worked hard to take more money out of our jeans. These days, thanks to Bob, we're better served by sticking cash under our mattresses than by opening a savings account. They haven't as yet come up with a way to tax the mattress accounts.