Monday, September 20, 2010

Class warfare

This past weekend I read a blog entry from a law professor by the name of Todd Henderson entitled "We are the Super Rich," in which he describes the financial challenges faced by his family despite a household income in excess of $250,000. While the posting can be read in full here (the link is to a google cached version as the original seems to have been taken down for some reason), the Cliff's Notes version is this: Henderson and his wife both work (she's a doctor who treats kids with cancer) but after purchasing an old house and renovating it, repaying school loans, retirement contributions, sending the kids to private school, paying taxes of over $100,000 and employing part-time domestic help (two legal immigrants, one from Mexico and the other from Poland) there isn't a lot left over. If taxes go up, expenses will have to be cut elsewhere. 

I didn't think a great deal about the post until I got to the comments section, where the first one was:
Boo hoo. You are in the top 2% of incomes. Most people (60%+)in the USA are living paycheck to paycheck. Time to pay up.
Time to pay up -- as though the tens of thousands already paid amounted to a pittance and Henderson was hithero some kind of leach. More:
Whiner. The tax rate is going BACK to what it WAS. Was this guy BORN in 2001? If not, he survived prior to the roll back.  
Basically, shut up and take it like a man. While such feedback can perhaps be dismissed as merely the rantings of a fringe minority, I then found out that none other than Brad DeLong, a UC-Berkeley economics professor who served as deputy assistant secretary of the treasury during the Clinton administration, approvingly quoted a critique of Henderson's piece. Where DeLong treads, Paul Krugman usually isn't far behind, and sure enough yesterday Krugman linked to DeLong's link. Krugman probably stewed over the piece a bit more, as he then authored a piece for today's New York Times entitled "The Angry Rich." Krugman writes:
Among the undeniably rich, a belligerent sense of entitlement has taken hold: it’s their money, and they have the right to keep it. “Taxes are what we pay for civilized society,” said Oliver Wendell Holmes — but that was a long time ago. 

The spectacle of high-income Americans, the world’s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. 
While the entire column is classic Krugman with the usual leftist fire-breathing one has come to expect from America's most partisan columnist, this excerpt really sums it up. According to Krugman it is bad form that the rich actually seem to believe they have a right to the money they earned, marginal tax rates in excess of 35 percent are necessary to preserve civilized society and high-incomes are simply a product of luck, as though life is a random lottery in which effort and reward are divorced from one another. The effort at de-legitimizing the accomplishments of high income earners could not be more clear. 

Returning to Henderson, the man appears to be the kind of person that the country should salute and emulate. Henderson and his wife are contributing members of society who improve the community in which they live. They are using their income to -- in large part -- maintain a house, raise well-educated children and help provide employment for at least two other individuals. But really, what does that matter? Henderson and his wife should be able to take their money and spend it at Las Vegas casinos for all anyone else cares. Who are Krugman and DeLong, or anyone else for that matter, to sit in judgment of how their hard-earned money is used?

Furthermore, are we somehow to believe that the government -- the same folks which routinely waste billions and cook-up ill-conceived programs such as welfare, public housing, the social security Ponzi scheme, and monuments to various politicians -- would better spend the money than Henderson's family? This is not to say, of course, that Henderson's tax liability should be zero. Everyone should contribute something in order to pay for necessities such as roads and police. But at $100,000+ in taxes I think Henderson has already paid his share.

Class warfare is well underway in the country right now. Krugman and his fellow travelers, who enjoy the sympathetic ear of the White House, believe the rich exist simply to serve as cash-cows to be relieved of their ill-gotten gains. They know full well that while voters enjoy the government largess they seek to dispense that they are less keen on footing the bill, which must instead be borne by a small minority.  They seek a society in which most pay little or nothing and the burden is shared by a select few. As the saying goes, when Peter is robbed to pay Paul, you can always depend on Paul's support. Absent Peter's payments, however, the entire scheme comes crumbling down, which explains Krugman's vociferous response.

Then, when finished with their assault on the rich, the left pontificates with genuine curiosity as to why the economy sputters.


brad said...

Where were you in 2001 and 2003, when Bush rammed through Medicare Part D without providing a revenue stream to pay for it?

It would have been nice to have you on the side of limiting expansions in government spending then--we in the Rubin wing of the Democratic Party could have used your support.

After all, as Milton Friedman liked to say, to decide to spend is to decide to tax. And once you have decided to spend there are no backsies: you can't then say that you don't want the taxes...

AlanDownunder said...

Since Reagan, the right has been winning the class war hands down. And look where it got you.

Colin said...

Where were you in 2001 and 2003, when Bush rammed through Medicare Part D without providing a revenue stream to pay for it?

I was here in DC. And I opposed it. The blog didn't start until 2005, however.