Mr. 'Deling' Responds to 'I make 500K/yr and am not rich'

Weirdly, I know people who make around $70k who claim that they're very well off, and seem to actually feel that way. But the people making $300k, $500k, $800k? Invariably they feel middle class, perhaps upper-middle-class, but not even that upper. My guess is that it has a lot to do with social circles and where you live. The guy making $70k who lives in a modest house and whose friends all work at coffee shops feels rich; the guy making $300k who lives on the upper east side of Manhattan and whose friends are all VPs doesn't.

Instead he should be pushing the argument "Why the hell should I have to pay for all these government just because I'm more productive than other people? If I use $10,000 a year worth of government services why am I paying $200,000 for it while some other guy using $10,000 a year of government services pays nothing? Why can't the burden be spread more equally among all those who use government services instead of lumped almost entirely on the top 10%?"

That's the argument he should be pushing. Of course there are possible responses to that, but it's a better starting point for debate than "I only make $500K a year, you should tax the real rich, who are making $800K a year!"

-$60k/year for three children in private school -$50k building home equity -$50k in the 401k

But the real point is in the sections about having bought the house at the top of the market and the equity portfolio having fallen: Mr. Henderson feels poor because his net worth has dropped. He has less savings than he used to, so of course he feels he has to save several average family's annual income to catch up.

Being a high-powered law professor can't help, of course -- that's one of those jobs where your not-so-clever peers are big law firm partners and your half-decent students make your salary two years out of school. Even more so than the average 99%er, law professors have a ginormous amount of keeping-up-with-the-jones' self-pity.

Assume a scenario where a simplified tax (your choice of methods such as flat, no-income-but-higher-sales-tax, etc.) exists such that, say, 10 hours of time is enough to prepare a high net worth individuals' return.

Even if the net taxes were a little higher, productivity would go up because this busywork which does nothing for the economy disappears.

And since many CPA firms would be getting less hours, they could go and do something productive as well.

That little snippet gives the whole game away. We have a strange situation in which Michael O'Hare, speaking as an ostensible advocate of "equity" and "the poor", nevertheless casually mentions that he would not pay attention to a word coming out of the mouth of an actual poor person, and that only a law school professor is worth listening to.

Of course, he wouldn't frame it that way. There is a tacit and unspoken mental calculation in which "Limbaugh listener" cancels out and reverses the street cred of "high school dropout", and in which "rich" reverses the intellectual cred of "law professor". So he feels fully entitled in trashing a poor person who does not share his views.

He does not spare one moment to consider that perhaps his views are a function of his power and social class as a Berkeley professor, rather than the outcome of some Platonic reasoning process. He believes what he believes and mouths what he mouths because that's what everyone else around him believes, and because political deviation is punished with social ostracism.

In particular, he is one of those who calls most loudly for "equity" without practicing it himself in his treatment of others.

The point is that there are other things in life that people value beside income. Income can be quantified, so we tend to fixate on that. But what about things like looks? Or IQ? Or power? Or status? Like the status to get people to take you seriously. Especially the last.

That can't be taxed, at least not directly. Imagine how Harvard professors would howl if Harvard degrees were handed out willy nilly, or redistributed from the (no doubt privileged) people who'd earned them to the unprivileged who hadn't. Imagine if column inches of New York Times columnists were taxed and redistributed to people who don't have as much of a say in national affairs.

The narrow focus on income happens for a reason. People who have more status than money (like O'Hare and Delong) are using the government to attack people who have more money than status. There is no question that Brad Delong will come out better in this trade, because he and those like him are the ones dictating its terms.

First, his jab at entrepreneurs who "extract surplus value" is an appeal to the core tenant of Marxism: that all profit is an exploitation and an unfair "extraction of value" from labor. I don't want to have a knee-jerk reaction to his argument just because of that, but it doesn't set a good tone for me.

Second, part of the problem I have with the tax increase is this: who knows what all that money will be used for? It could be used for taking care of the great unwashed masses (disdainful much?), or it could just as easily be used to invade more foreign countries in the name of "freedom", prop up outdated and failing industries, or bail out gamblers on Wall Street. The government of the last twenty years seems to have been shockingly bad at allocating the ridiculous amounts of money they collect from us; why should we give them more?

It's for this reason that I find the concept of a "flat tax" so compelling.

There are plenty of holes in implementing a flat-tax, but fundamentally everybody putting an equal share of their income into the pool feels right to me.

http://en.wikipedia.org/wiki/Flat_tax