Rich People Pity Party
Is someone who makes $250,000+ a year "rich"? Is that a serious question?
I almost feel sorry for Todd Henderson. Last week, the University of Chicago Law School professor took to his blog to complain about how he and his wife, who make north of $250,000 a year combined, are going to suffer under the Obama tax plan. (Under Obama's plan, marginal tax rates for couples who make more than $250,000 would return to their Clinton-era levels. Those couples' overall tax burden would still be lower than it was during the Clinton years. But nevermind all that.) I'm sure Henderson didn't expect that post to lead to his 15 minutes of (internet) fame. But it did.
Prof. Henderson's complaints drew the attention of Berkeley Public Policy professor (and blogger) Michael O'Hare, who called Henderson's post a "truly amazing pasticcio of mendacity, ignorance, and small-minded cupidity." O'Hare's post inspired Brad DeLong to weigh in with a multi-thousand-word smackdown of Henderson. DeLong's post, in turn, earned Henderson an attack from no less than Paul Krugman. I doubt that Henderson expected his post would bring him under fire from former Treasury department official and a Nobel prize-winning economist. (Now Felix Salmon has weighed in, too.)
Judging from a follow-up post he wrote Sunday, Henderson thinks that the fact that Krugman is attacking him proves him right. He seems to be suffering from Krugman Derangement Syndrome, an affliction that's very common on the libertarian right. (He doesn't even engage with DeLong's critique.) Then he compares the government to "a thief" and threatens to stop working (i.e. "Go Galt") if his marginal tax rates go too high ("I can choose to watch the Steelers or help a hedge fund with a corporate law question").
If you check out Henderson's other writing, you'll see the Hayek-worship and criticism of altruism that are endemic among fervent economic libertarians. I emailed Henderson and asked him to elaborate on his view of taxation. Here's what he said:
I don't think taxation is immoral. Taxation is essential to an ordered society. It is a crucial way of altering behavior to get people to bear the costs of their behaviors (e.g., Pigovian or sin taxes). It is also necessary to raise money for government, which is essential for our civilization. As I said in my "10 things," follow up, I'm not an anarchist and I see a large role for government in our society to act where private and market-based actions fail. My point with the thief analogy is just that the issue isn't just amount but what we do with the money and the impact it has on the people being taxed. [I added the link. —NB]
I think the key takeaway here is that Henderson, while undoubtedly rich and clearly libertarian-leaning, still concedes that government is "essential for our civilization" and taxation is "essential to an ordered society." Of course taxes have impacts on the people being taxed, and what the government does with tax money matters. But basically, we're just haggling about price.