Poor Rich Folks

Inequality is a funny thing because most people think about it as the rich people and the poor, but that isn't really what makes for high overall levels of inequality. What does is the super-rich. If your household brings in $45k/year you are just ahead of the median income and so are doing better than 50% of households. If you double your household income you push over the 75th percentile and are doing quite well. A household bringing in $250k/year is doing very very well--better than 96% of all households--doubling that still doesn't get them to the 99% (data from here graphically here). More importantly, doubling that doesn't really do a whole lot for standard of living.

Basically if you go from $45k to $90k/year you see a rather large boost in your economic standing, but if you go from $250k to $500k then you are...pretty much exactly the same place. You have the same economic peers. You still can't really have a private jet or multiple $10 million vacation homes or get a building at Princeton named after you.

The super-rich suck up such a large amount of our income and wealth that no-one, not even those who are, in fact, rich looks that way. People earning over $1M/year grossly distort the income distribution. Maybe this is an argument for adjusting the tax brackets with the top one starting at $1M and being a sizable 60%+ and maybe it's an argument that people making $300k should stop bitching about "tax hikes on the rich" (including them) since they are not really the ones affected by it.

Really, though, it is a calling to stop giving a shit about money at some point. For individuals earning $400k/year having plus or minus $20k doesn't really do anything for them (and if it does then they really should reassess their lives). What a person can do with $200k is not a whole lot different than what a person can do with $500k. That difference gets even less with more money.

Once you own two fully furnished houses, a few cars, and have enough income to cover all expenses plus a couple nice trips, and sufficient savings so that your kids can go to school, then what more do you need? What more do you want even? Maybe it's from not being rich ever, but I can think of a lot of neat things to buy/have/spend money on, but I can't think of anything that I could do earning $1 million a year that I couldn't earning $250k/year, other than retire sooner, but even then: I like my job and would likely go stir crazy without it. Further, I do have a pretty amazing imagination; I just don't have the desire to own a diamond studded platinum case for my cell phone or anything else so ridiculously ostentatious.

Maybe I'm the odd one out, but I don't think so. For as little good as money can be for an individual beyond a certain point, I will never understand the insane response to someone proposing that people earning far more than the vast majority in this country pay a bit more in taxes. But that insane response is winning, and has been for over 3 decades now.

Poor rich folks. We wouldn't want them to have to work now, would we?