The Homa Files

I never agree with ultra-liberal NY Times ranter Paul Krugman. Well, I guess I should never say never.

While I disagree with his conclusions, I think he provides some interesting perspective in this op-ed.

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Excerpted from NY Time’s Op-Ed,  “Now That’s Rich”, Paul Krugman, August 22, 2008

Last weekend, Pastor Rick Warren asked both presidential candidates to define the income at which “you move from middle class to rich.”

Mr. Obama answered the question seriously, defining middle class as meaning an income below $150,000.

Mr. McCain, at first, made it into a joke, saying “how about $5 million?” .

The real problem, however, was with the question itself.

When we think about the middle class, we tend to think of Americans whose lives are decent but not luxurious: they have houses, cars and health insurance, but they still worry about making ends meet, especially when the time comes to send the kids to college.

Meanwhile, when we think about the rich, we tend to think about the handful of people who are really, really rich — people with servants, people with so much money that, like Mr. McCain, they don’t know how many houses they own.

The trouble with Mr. Warren’s question was that it seemed to imply that everyone except the poor belongs to one of these two categories: either you’re clearly rich, or you’re an ordinary member of the middle class. And that’s just wrong.

In his entertaining book “Richistan,” Robert Frank of The Wall Street Journal declares … that country is divided into levels, and only the inhabitants of upper Richistan live like aristocrats; the inhabitants of middle Richistan lead ample but not gilded lives; and lower Richistanis live in McMansions, drive around in S.U.V.’s, and are likely to think of themselves as “affluent” rather than rich.

Even these arguably not-rich, however, live in a different financial universe from that inhabited by ordinary members of the middle class: they have lots of disposable income after paying for the essentials, and they don’t lose sleep over expenses, like insurance co-pays and tuition bills, that can seem daunting to many working American families.

Which brings us to the dispute about tax policy.

According to estimates prepared by the nonpartisan Tax Policy Center, those Obama tax increases would fall overwhelmingly on people with incomes of more than $200,000 a year. Are such people rich? Well, maybe not: some of those Mr. Obama proposes taxing are only denizens of lower Richistan, although the really big tax increases would fall on upper Richistan.

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Full op-ed:
http://www.nytimes.com/2008/08/22/opinion/22krugman.html?_r=1&oref=slogin&pagewanted=print

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This entry was posted on August 25, 2008 at 7:15 am and is filed under Government & Politics, Taxes, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.