Income Inequality Again

Little did I know the tumult on the web about this subject when I mentioned it last week. Now I find another example of why it has become so difficult to frame the discussion and get sensible policy making. The rich think they’re poor. Or, rather, the not-quite-the top-tier think they are poor and thus not deserving of a tax hike.

Here is the example:Professor Henderson’s Sniveling Post

Read it an weep.

This is someone whose family income is around $440,000 a year and is complaining that he is a “working American” and that the Obama plan to allow the Republican tax increase set in motion back in 2001 and due to come into effect next year to go ahead is unfair.

Unfair?

Brad DeLong shoves that one where it won’t see daylight for a while. Deservedly so.

I won’t bore you with the snivel. What I will record is my astonishment that anyone with the kind of education that the erstwhile Professor Henderson has, should know better.

De Long’s rebuttal is way more sensitive than mine would have been. Anyone whose family income is $440,000 a year need not complain, even if the end of month cash flow looks bad. The point is that the distance between gross income and net income reflects a whole bunch of choices: where to live, how many kids to have, where to send those kids to school etc. If those choices eat up the income, and you’re not happy about the net income, then change your choices. That might be difficult. It might even force you to have to give up something you really like.

But at least you had the option.

Really poor people don’t have choices.

That’s what the income inequality gap is about.

It is not about coddling upper middle class folks who regret that the really rich – those above them in earnings – have gamed the system so well that the “merely-well-off ” feel poor.

DeLong makes that point. Let me repeat it: it is beyond stupid for an affluent professor to moan about Obama and his intention to allow the GOP tax increase to go ahead., when the real villains of the piece are the super-well-off, the senior partners, the CEO’s, the managing directors etc who have scammed so successfully that rich folks like Professor Henderson feel “poor” by comparison.

It is a sick society where someone like the professor can, in good conscience, write that a tax increase on his family’s $440,000 is “unfair”. No wonder we cannot get a proper discussion going. Someone sitting in the 98th percentile thinks he’s not well enough off.

In fact it’s not just sick. It is absurd.