Yesterday, in the post The Rich Do Whine I linked to a post about a post where a really rich guy is whining about how he isn’t rich at all, and yet Obama is going to bring his taxes up to pre-Bush levels. (This means, by the way, people making $251,000 income might see their taxes go up as much as $39, a little over $3 per month — that is what a 3.9% increase on income above $250K means.)
Brad DeLong makes a very good point about why the rich are whining. The reason is that the income inequality has become so extreme that even the really rich see people above them who make VASTLY more than they do, so they feel like they aren’t making hardly anything at all. They don’t look down, they look up, and they see people making millions, hundreds of millions, even billions in a single year. In Which Mr. Deling Responds to Someone Who Might Be Professor Todd Henderson – Grasping Reality with Both Hands,
Cast yourself back to 1980. In 1980 a household at the bottom of the 1% rich households in America had an income equivalent in today’s dollars $190,000 a year. … You don’t look downward much. Instead, you look upward. Of the 100 above you, 90 in 1980 had incomes less than three times their incomes. And they would have known of 1 person of that 100 who was seven times as rich as they were.
Now fast forward to today. Today a household at the bottom of the 1% rich households in America has an income of nearly $400,000 a year […] . Henderson 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.
One more nasty outcome of the Reagan Revolution: even the really rich feel poor compared to the really, really rich who are the primary beneficiaries from conservative policies.