Post mid-terms, if Republicans don’t capture the Senate, taxes for the wealthy are likely to go higher for investments, estates and income, but they’ll still be lower than the rates during the 1990s when the wealthy flourished, Dutta notes. Plus, the anticipation of higher tax rates may spur the rich to actually spend more right now, the economist argues.

A spate of recent news out of the luxury sector may back up this contrarian thesis by the Merrill economist. In a tie up of two giant French luxury companies, LVMH Moet Hennessy Louis Vuitton revealed over the weekend that it built up a 17 percent stake in Hermes International.

Last week, shares of Saks surged after Diego Della Valle, an Italian investor, raised his stake in the U.S. luxury handbag-maker to 19 percent.

Still, some investors have their doubts.

“Although Merrill’s fundamental argument is strong, it fails to take into account a change in the mentality of the American consumer that stretches throughout all income brackets,” said Jim Iuorio of TJM Institutional Services. “The lasting effects of this recession will be fear and frugality. Although the balance sheet of the wealthy has been built back up by the stock market’s rise, the memory of wealth destruction that occurred in the fall of 2008 should last for a long time.”

For middle-income earners, the spending forecast does not look too bright. Seventy-one percent of those in this bracket intend to spend less this holiday season relative to last year, according to a survey by First Command Financial Services quoted in a report from Gluskin Sheff.

“To think, we are viewed as being bears on the economy,” said David Rosenberg, chief economist and strategist at Gluskin Sheff, in the note. “The consumer is about to take on the role of Scrooge.”

Merrill agrees that overall consumer spending will continue to be weak, but believes the wealthy could be one pocket of strength.

Just ask the 133 U.S. buyers who will walk out Christmas morning with a big red bow on the fastest and most expensive Porsche ever made.

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