Wealthy Law Professor Laments: I Don't Feel Rich

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Law Professor Todd Henderson's blog post yesterday on Truth on The Market, created such a firestorm that today he deleted the post.Citing an "electronic lynch mob" Professor Henderson wrote that he has received hate mail and mean comments from posters, and the post has  caused his relationship with his wife to become strained. (She disagrees with his sentiments vehemently, and was not made aware of the intention to go public prior to the publication.)

UC Berkeley Professor Bradford DeLong has re posted the commentary for the sake of posterity and to further the conversation on why the rich don't feel rich. The link will take you to Professor Henderson's original arguments on why he and those in his income bracket should not be subject to additional income taxes if the Bush tax cuts are repealed. Professor Henderson and his wife make approximately $450,000.00  annually and argue that they don't feel rich, and know people that make ten times their income. Here's a comment from Professor DeLong on this:

Instead, Mr. Xxxx Xxxxxxxxx looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.

And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them--widening income inequality over the past generation has excluded him from the rich who truly have money.

Even if one accepts the premise that making $450,000 a year doesn't make one rich, asking for American's that have prospered and done well to give a bit more back in taxation to help the truly hard working, out of work and working poor doesn't seem like asking too much. Does it?

Remember, we are hearing from conservatives and Republicans primarily that spending is out of control, and sacrifices will have to be made by all Americans. Extending the tax cuts to the 2% of the population that Professor Henderson belongs to, will cost the US Government approximately 690 Billion Dollars over the next ten years.  Let's also not forget that when these tax cuts were enacted no offsets in spending were made to pay for the cuts. That is not the making of fiscal conservative economic policy. Current debate and arguments by proponents of extending the tax cuts for all income groups are the same groups that are telling working class Americans and retirees on fixed incomes,  to expect cuts to Medicare and Social Security "entitlements." 

If President Obama has his way, and only extends the cuts to those making 250,000 for married filers, and 200,000 for individuals the higher income earners will still see  tax savings. For example:  Taxpayers with income of more than $1 million for 2011 would still receive on average a tax cut of about $6,300 compared with what they would have paid under rates in effect until 2001, according to the analysis, which was prepared by the Joint Committee on Taxation at the request of the Democratic majority on the House Ways and Means Committee.

That compares, however, with the roughly $100,000 average tax cut that households with more than $1 million in income would receive under current rates.

Filers with taxable income of $500,000 to $1 million would still get on average a tax cut of $6,700 compared with pre-2001 rates, according to the data from the tax analysts. But that compares with roughly $17,500 if the top Bush tax rates were maintained.(source nytimes.com)

And if you're thinking this is a case of class warfare, here's a quote from Warren Buffet on the matter: 

“but it’s my class, the rich class, that’s making war, and we’re winning.”