Opinion

Felix Salmon

The whining rich

By Felix Salmon
September 20, 2010

Todd Henderson’s whine about how he’s only scraping by on $450,000 a year in his million-dollar Chicago house is causing quite a stir in the blogosphere. (Tyler Cowen says that “this number seems not to be true”, but Henderson isn’t clarifying things, and it’s very hard to come up with a substantially lower number which would result in his family still paying “nearly $100,000 in federal and state taxes”.)

Tyler says that the rich have just as much right to whine as the poor, which is a fair point. But it’s also reasonable to examine this particular law professor’s argument closely. For instance:

If our taxes rise significantly, as they seem likely to, we can cut back on some things. The (legal) immigrant from Mexico who owns the lawn service we employ will suffer, as will the (legal) immigrant from Poland who cleans our house a few times a month. We can cancel our cell phones and some cable channels, as well as take our daughter from her art class at the community art center, but these are only a few hundred dollars per month in total.

Here’s Brad DeLong’s fantastic response:

The big expenses in the Henderson family budget–their $60,000 a year in contributions to tax-favored retirement savings vehicles, their $25,000 a year savings building home equity, their $55,000 for housing, their $60,000 in private school costs, even their $10,000 a year for new cars–are simply out of reach for the overwhelming majority of Americans…

By any standard, they are really rich.

But they don’t feel rich. They have a cash flow problem. When the bills are paid at the end of the month, the money is gone–and they feel that they have to scrimp…

Professor Henderson’s problem is that he thinks that he ought to be able to pay off student loans, contribute to retirement savings vehicles, build equity, drive new cars, live in a big expensive house, send his children to private school, and still have plenty of cash at the end of the month for the $200 restaurant meals, the $1000 a night resort hotel rooms, and the $75,000 automobiles. And even half a million dollars a year cannot buy you all of that.

But if he values the high-end consumption so much, why doesn’t he rearrange his budget? Why not stop the retirement savings contributions, why not rent rather than buy, why not send the kids to public school? Then the disposable cash at the end of the month would flow like water. His problem is that some of these decisions would strike him as imprudent. And all of them would strike him as degradations–doctor-law professor couples ought to send their kids to private schools, and live in big houses, and contribute to their 401(k)s, and also still have lots of cash for splurges. That is the way things should be.

The first thing to note here are Henderson’s priorities: for him, it seems, it’s more important to spend $60,000 a year on retirement savings, and to send his kids to private school, than it is to have a cellphone. That alone marks him out as very unusual among Americans, most of whom will spend money on a cellphone long before they send their kids to private school or put that fifty-thousandth dollar into their retirement savings.

And in reality, I doubt that a four-point increase in the tax that he pays on any income over $250,000 is going to stop him from hiring someone to mow his lawn. And it’s certainly not going to make him give up his cellphone.

But what’s very clear here is that Henderson doesn’t feel rich. As DeLong says, he’s not comparing himself to the hundreds of millions of people who earn less than him: instead he’s comparing himself to the handful of people who earn vastly more than he does. People who don’t seem to worry about money at all. Who have multiple houses. Who charter jets. He looks at those people and thinks that they are rich, and that therefore he, with his monthly budget, isn’t.

There’s no doubt that people earning $250,000 or more are rich. The simple ability to dismiss a whole class of expenses as “only a few hundred dollars per month in total” makes you rich.

But by the same token, many rich people don’t feel rich, and so describing them that way gets their backs up. And in fact it’s good that the rich don’t feel rich: it means they have more incentive to keep on earning and producing and adding value.

So maybe we shouldn’t be so rude about the likes of Todd Henderson: without rich people constantly striving for extra dollars, America would be in an even worse position than it is. But equally, we shouldn’t take their pleas seriously.

For most people, “rich” starts at roughly double whatever their own household income is. It’s the hedonic treadmill: you race towards it, but you never achieve it — even when you’re living in a million-dollar home and pulling down something north of $400,000 a year. Or, I daresay, when you’re living in a $4 million home and making $1 million a year. It’s just that above a certain income, people (Ben Stein, of course, always excepted) tend to have the good sense not to whine in public about how hard their life is.

Update: Henderson has now taken down his post, saying that an “electronic lynch mob” has “caused untold damage to me personally”.

Comments
62 comments so far | RSS Comments RSS

For my part what I love when reading these rich people whining about taxes is it always comes down to threats: you tax me more, I’ll stop spending on you little people. It’s not ‘everyone’s gotta do their part to right the ship called America’, it’s ‘I earned mine and deserve more, and I’ll screw over anyone who tries to mess with that.’ *shudder* I also think it’s particularly funny that he makes a point to say that his underlings are legal immigrants….

Posted by CDN_finance | Report as abusive
 

“The first thing to note here are Henderson’s priorities: for him, it seems, it’s more important to spend $60,000 a year on retirement savings, and to send his kids to private school, than it is to have a cellphone.”

Sounds to me like he has his priorities straight. As for retirement, he isn’t saving an excessive amount given the cost of his current lifestyle. If he puts away LESS than $60k/year, he’ll have to cut back dramatically in retirement. That is cutting off your leg to spite your foot.

And private school? If you felt that your child would be significantly better off in a private school than in the public system, wouldn’t you make that a top priority? Even if you were making a quarter that amount?

I’m basically in Henderson’s situation, though with much lower earnings. Strong retirement savings, costly child care and tuition bills, and no cell phone or cable TV. Except for one small difference — he considers himself poor while I consider myself rich.

Posted by TFF | Report as abusive
 

Henderson’s post reflects the angst of the professions in a post-Reagan world in which the super rich have pulled away from them. These guys went to college with lots of people who didn’t bother with an advanced degree but went into finance instead. It galls them to see these friends, whom they matched or beat in school, and who work no harder, propelled into an altogether different class level. Such unfairness permeates the system and to much greater degrees in other areas. But it is likely the first taste of such unfairness that these professionals have had. No doubt they support higher taxes on their classmates. What they don’t seem to realize is that even if they are included in such hikes, the progressive structure of the hikes will make them feel better about themselves by reducing the gap, even if they have less money in their pockets.

Posted by Charles1111 | Report as abusive
 

Felix – I think that Henderson’s point was merely that, at least at his wealth level, trickle down economics is very real. It doesn’t matter if you classify him as “Rich” or not – that’s precisely the point – he doesn’t have tons of disposable income. Thus, if his taxes are raised and his disposable income is further sliced, he will have to make cutbacks (like the housekeeper, or the landscaper – how will they like that?)

Now, it’s important to note two things: 1) no one is saying that Henderson has some God-given right to a landscaper and a housekeeper – only that he is likely to cut spending in those areas if he has less money, which will hurt those people. 2) what matters isn’t how much money someone makes, it’s how much money they spend relative to what they make which determines what affect raising taxes will have on them.

I mention this second point because it seems to be the source of the trickle down economic debates. If someone makes $10mm a year, and spends $1mm a year, then the argument “if you raise my taxes, it will hurt everyone else because I won’t spend as much” is not as credible than if someone spends the majority of what they make – regardless if that “make” is $100k, $1mm, or $10mm.

get it?

Posted by KidDynamite | Report as abusive
 

Whenever anyone talks about a tax increase on those earning income of $250,000 or more, they would instead write “taxable income of $250,000…”. A couple at that income level will have at least $20,000 in deductions and exemptions, if not $30,000 or $40,000. So it’s really a tax hike on those making $270,000+.

Posted by Philadelphian | Report as abusive
 

Interesting. I just think it’s hard to feel rich when you’re surrounded by people on a similar or higher economic plane on a day-to-day basis:
- He lives in Hyde Park which may seem inexpensive if you rely on broad statistics, but it’s very expensive close to the university. His neighbors are doing well.

- He works in the Law School. His colleagues are doing very well (don’t make the mistake of conflating the stereotypical poorly-paid professor with a well-paid law school professor).

- He teaches securities law and occasionally mingles with professors from the business school. Like the Law School, the Business School pays professors very well.

- He sends his kids to the Lab School (where Obama’s kids went prior to moving to DC). The parents of those kids are all doing well.

So it’s not just a matter of the handful of people earning much more than Henderson, I think it’s more the people he deals with every single day. At work, at home, and at his kids’ school, the people he interacts with are doing about as well as he’s doing, or better. And it’s hard to feel rich when that’s the case.

The only broad class of “not rich” people that he deals with on a daily basis are his students. And it’s easy to think of the students as a special group – people that are currently not wealthy but are likely to be so in the future (because of the things you’re teaching them, no less!). In fact, if you’re teaching at the Business School or the Law School, you can even convince yourself that you’re not rich because if you weren’t teaching, you could make a much more lucrative living in private practice.

I simultaneously understand what he wrote and think it’s ridiculous.

Posted by Beer_numbers | Report as abusive
 

Felix,

This does not seem far fetched, but where does this come from? “For most people, “rich” starts at roughly double whatever their own household income is.”

Posted by david3 | Report as abusive
 

To most people, rich is a quality of net wealth, while income is a quality of, well, income. Earning $250k or more makes you high income. It does not make you rich. Most people I talk to associate ‘rich’ with having enough wealth that you no longer need to work. If you own assets that give you a net gain (interest earned – debt costs) of $250k, then most would agree you are rich. If you have a gross income of $250k/year with debt payments of $15k/month, I don’t think many would consider you rich.

The ludicrous thing is only calling it whining for the top 2% income. The fact is, we are going to have to raise taxes on a lot more than the top 2% income; but when people in the top 40% of income push for more government spending but lower taxes, that’s not whining? To people making the household average income, $100K looks like a pretty high income, too.

If we as a country really think we need to maintain our current projected spending, lets let all of the Bush tax cuts expire, stop ‘fixing’ the AMT tax, and bring back estate taxes starting at $100K with no charitable giving exemption. Until we ask for the average citizen to pay for the costs of government, it just looks like class warfare to me.

Posted by MattJ | Report as abusive
 

First, I wish to commend Mr. Henderson for putting his personal info and opinion out there for the hungry hordes to pounce upon. He must have known what was likely to happen and he threw caution to the winds. That shows conviction (and more than a hint of stupidity and pride).

Second, Felix is right. The rich person is always about twice as well-off as you. Charles111 also makes an excellent point. The professional class is green with envy toward the super rich (which, by the way, Henderson does not qualify for, though he claims membership in–perhaps he should write a memoir and run for president if he wishes to bump himself up at this late stage in the game).

Third, I too worried about Obama’s well-laid out plan to raise taxes on the plus-250ers. But the danger has receded for us, as we lost that excessive income in the crash, along with our Chicago area million dollar home.

So I can say to Mr. Henderson, “come on in, the water’s fine!.” It’s really not so bad in here.

The only difference is, whereas when we “owned” our home we could not afford a lawn service, but now that we rent our landlord sends one over regularly. Double plus bonus!

Finally, I do have to laugh when I read about someone who lives a block or two away from the Obamas in classically liberal Hyde Park complaining about rising taxes. Wealthy professionals live in Hyde Park because they want to be in an authentic and integrated community. But wealthy professionals can NEVER send their kids to public school in Hyde Park. The irony is delicious.

I don’t doubt Mr Henderson has received some support from colleagues and neighbors to his face, and howls of derisive laughter behind his back.

Posted by LadyGodiva | Report as abusive
 

Why are you taking this spoilt tw*t seriously? Such self-pitying idiots are always with us.

Posted by Gaw | Report as abusive
 

The issue shouldn’t be framed as “should we tax the rich”, but rather “should we tax those who can more easily afford to pay more taxes”? Forget the semantics about who is rich – can a person who makes $300K per year absorb a slight tax hike easier and with much less sacrifice than one who makes $30K per year? Those earning >$250K would be hard pressed to say no.

Look, we’ve run up this huge tab, and somebody has to pay the bill. You’ve got a lot of people who have no money and no credit, and a handful who have some money and some credit. Let’s have the latter group pay a little more, not because they are rich, but because they can.

Posted by OnTheTimes | Report as abusive
 

Seems that Mr. Henderson’s initial post has been taken down…

Posted by TFF | Report as abusive
 

Doesen’t anyone have their kids help with the yardwork or house cleaning chores any more? Geez. And whats the point of mentioning that his gardener is a mexican.. is that a status thing?

David Brooks (a rare instance of an insightful republican) had a great article on the politics of why tax raises on the super-rich doesn’t go-over with the kind of support one would think.

http://query.nytimes.com/gst/fullpage.ht ml?res=9B01EED61F3EF931A25752C0A9659C8B6 3

“The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday. So right away you have 39 percent of Americans who thought that when Mr. Gore savaged a plan that favored the top 1 percent, he was taking a direct shot at them.”

Posted by wolphkaat | Report as abusive
 

As someone who lives on the North Shore of Chicago and sells real estate there, I assure you that there are many Mr. Hendersons around these parts, as well as in Hyde Park on the city’s South Side. From my vantage, this is the profile: they are highly educated 35 to 50 somethings, usually graduates of elite colleges or universities; they often are often a two-income high earning household and, thus, are “always very busy”; they do not want to buy any home that is not in tip-top shape and that has all of the requisite “bells and whistles”; they allege that they are liberal yet, truth be told, are actually quite conservative in their ideas about where they should reside and who they should socialize with; last, absolutely all of their children are, in the words of one Garrison Keilor, “above average”–if not “incredibly gifted.” I’ve learned that the same people who think their children are exceptional tend to think that they are entitled to lead exceptional lives and once they adopt this view, they no longer things that their desires are exceptional.

Frankly, they are without fail exhausting, and their sense of entitlement is as palpable as Mr. Henderson’s.

Posted by Susaninchicago | Report as abusive
 

Reading the article, what really struck me was the incredible debt load the Hendersons are carrying. Between student loans ($500k!!!) and mortgage debt on a million dollar home, they are carrying debt that is as much as 6x their annual income. I don’t care how much you earn, that is a LOT of debt (half that figure is more comfortable).

Posted by TFF | Report as abusive
 

“The most telling polling result from the 2000 election was from a Time magazine survey that asked people if they are in the top 1 percent of earners. Nineteen percent of Americans say they are in the richest 1 percent and a further 20 percent expect to be someday.”

But the top one percent clearly think they are in the middle third.

Seriously, though, this is ancient history. Today the pendulum has swung all the way in the other direction. Nobody believes they will ever earn enough to pay Obama’s “rich” taxes. They will, and they will pay heavily on it.

Henderson’s being an ass does not alter the fact that he has half a point.

Posted by LadyGodiva | Report as abusive
 

“The simple ability to dismiss a whole class of expenses as “only a few hundred dollars per month in total” makes you rich.”

Delightful. I hadn’t thought of it this way, until I realized that a few hundred dollars could pay for my car, my insurance, my student loans, and a certain times in life, my entire place of residence. Ah, to live the life of my one of my betters.

Posted by strawman | Report as abusive
 

F the rich.
I’ll be robbing their houses when I lose my job.
No rich person ever did anything to help me.

Posted by pessimist88 | Report as abusive
 

TFF:
Mr. Henderson put up a new post:

http://truthonthemarket.com/2010/09/20/i m-sorry/

hopefully the old one is on Google cache, or will be found on the way back machine in a few months.

Posted by PhilPerspective | Report as abusive
 

“F the rich”.

Wow. A little class envy there?
“No rich person ever did anything to help you”?
Why do you need help? Learning disability? Handicap?
Unlikely.
Why didn’t you work hard to make a good living for yourself? What did you do instead after school, growing up?
Why do you think it’s OK to take from people who did work hard?
You do realize that once all the “rich” are taxed into oblivion, or ambition is completely removed from the people in this country as more slouch and depend on the government to give them something, that “rich” will become redefined. People making 20K a year might then “hate” those making 50K a year, because they have it better. People who expect to have a better lifestyle making 50K a year will get no sympathy from those making less. Then, those making 50K a year can pay.
Eventually, everyone will have the same lifestyle in poverty..then we’ll all be happy, won’t we, genius?
No more complaining from the people who didn’t apply themselves about the ones who did.

Posted by OhReally444 | Report as abusive
 

Years ago, a best-selling campus t-shirt read: “The University of Chicago: Where fun comes to die.”

Perhaps Henderson is realizing that, although he earns a large income & even lives near Obama, he is definitely NOT rich because the quality of life he thought his income would afford is proving impossible to attain — and is possibly unattainable at any income — for families like his in Hyde Park.

Henderson & Obama live in one of Chicago’s “Green Zones”: a heavily patrolled area outside of which lie vast stretches of blasted, very dangerous neighborhoods. (Chicago’s homicide rate exceeds by far NYC’s & LA’s; three Chicago police officers have been killed, gunned down really, so far this year.)

Like many others, Henderson is realizing that the quality of life that he assumed would be correlative with his household’s income is not for sale at any price in Hyde Park.

(I’ve lived in the Bay Area & Hyde Park. There’s no comparison: one dollar of earned income in the Bay Area is worth, on the quality of life metric, at least two in Hyde Park.)

Henderson ought to read two other famous Hyde Park academics, who both eventually gave in & moved out: William J. Wilson & Saul Bellow.

Posted by dedalus | Report as abusive
 

Here’s a better solution than the “4 point” (which represents nearly 10% increase)..

quit spending our money on stupid crap. Then we wouldn’t “need” a tax increase. On anybody.

I see a LOT of class envy. It’s the only way to start the class-wars necessary for big-govt. types to pass their agenda.

Personally, I’m not YET in that bracket. But between my girlfriend and I (25 and 28 respectively) we will be in the next 2 years.

I think that it’s sad that so many people find satisfaction at attacking those in a situation better than their own, rather than striving for that position, and grasping at opportunities to have it.

I grew up the son of a single father of 3. He put himself through a 2-year degree in radiology (RT) in his 40s, did construction before that. My sister worked full time and completed her degree in 7 years. She was the first person in our family with a college education. I joined the Marine Corps so that I could have access to an education. Got out after 4 years. Worked full time and completed my degree in 4 years. Went on to become the first, and only, member of my family with a graduate degree. Summa cum laude. Currently working on Doctoral-level. I make more right now than any member of my family ever has.

Work hard. Do the best that YOU can do. And quit worrying/WHINING about how much better off others may have it. Just because they have it better doesn’t give YOU the right to reach in their pocket and take it.

Posted by pnishr | Report as abusive
 

Houston we have a problem, the rocket motor has stopped.
The top 10% of taxpayers only generate enough income to run the Federal black hole for 10 days out of 365 if it was all confiscated!
Reaching apogee, or already in retrograde re-entry. Prepare for vaporization. Cash is trash anyway.
Are you with me Major Tom?

Posted by JP007 | Report as abusive
 

And were the rug to be pulled out from under him, where would he be?

I want to feel for the man a bit, especially because he has just had a third child and both probably aren’t sleeping and he is worried that he got them into hot water. And it seems he did. Those dang Joneses…

He has too much debt, and probably relied on tax breaks (but honestly why were pwople with his income even given those breaks for goodness sakes!) and he isn’t coping.

Money and pretentious living doesn’t buy happiness and rich is in your heart not your income, but people like that will never know true riches, not true happiness.

The endless Capitalist money wheel feeds his ego … and even that is a house of cards as fragile as your economy.

America, the land of entitlement!

(I bet the “legal immigrants ‘ are happy and celebrate life and having an income and a roof over their heads. Such irony there.)

Posted by hsvkitty | Report as abusive
 

Great piece this – one which you couldn’t have credibly posted pre 2007, during which year Henderson’s grumble would have gone either unnoticed or given nodding approval.

World stats on wealth distribution not only tell you right off the bat what the West’s problem is: they also act as a reality check.

http://nbyslog.blogspot.com/2010/09/ther es-austerity-and-theres-austerity.html

Posted by nbywardslog | Report as abusive
 

From another portion of DeLong’s post, the point is made that this guy is only looking at the people who are richer, but not the 99% who are poorer.
I would respect DeLong more if he would acknowledge that the average American is substantially richer than most people in the world.

Posted by fresnodan | Report as abusive
 

Meanwhile, a large fraction of the world’s population lives on less than $2 a day.

If they had Internet (and ten years from now they will), what would they think of all your little complaints? You say that after paying your rent and student loans and cable bill and hairstylist and your weed dealer and beer money, you can barely afford that daily $5 coffee at Starbucks?

To the vast majority of the planet, you ARE the whining rich.

Posted by anon242 | Report as abusive
 

Now I begin to understand how the French mus have felt in the run-up to their revolution. The incredible arrogance and overweening sense of entitlement of the upper classes makes me want to roll out the guillotine.

Posted by IntoTheTardis | Report as abusive
 

Pay attention please. We need this system to improve before we can fix it. We need taxation based on a “tax bond” that returns based on tax-base improvements or keeps what it needs to pay some bills to leverage a better future. We also need to go to 32 hour work weeks to add employees and allow more family time. Other options would be far worse. Scientifically we need a competitive base to grow and yet protect innovation with protections.

Posted by phyvyn | Report as abusive
 

Now is not the time to stop the wheel. I have been out of work since early 2009. We all need to pull on the rope to get us out of the mud to get us where we can stay out of the mud. You need your neighbors and they need you. Bicker about it another time.

Posted by phyvyn | Report as abusive
 

This is a story? Why not focus on the millions of Americans who are unemployed, or worse homeless? Mr. Henderson needs a reality check, I suggest he visit his local homeless shelter or soup kitchen. He is not poor by ANY standard, and for him to go on a pity party about his finances is a slap in the face to everyone else in this country whose wages have been flat and are struggling to get by. Mr. Henderson then has the gall to talk about reducing his spending on maids and lawn care. How much do those jobs pay again? I don’t care if I was starving, I would not work for this spoiled, entitled, selfish, unpatriotic American. Mr. Henderson needs to stop throwing tantrums like a spoiled 5 year old and start paying back to the society that allowed him to enjoy the success he has had in his life. THAT would be a sign of a true patriot.

Posted by BB1978 | Report as abusive
 

Instead of arguing how much people should pay, can anyone even point out the law that requires americans(not corporations) to pay an income tax. The IRS cannot point out the law, they only get you to pay through duress. Anyone who can point it out can claim the reward that’s been around for years.

Posted by HijoDeSonora | Report as abusive
 

@ IntoTheTardis
” The incredible arrogance and overweening sense of entitlement of the upper classes makes me want to roll out the guillotine” So because you feel entitled to part of their money it’s ok but if the “rich” feel entitled to keep the money they earned, you feel entitled to murder them?

Posted by HijoDeSonora | Report as abusive
 

The simplest answers always seem to allude us, what if Mr Henderson and you and I and every other private citizen were to pay the same % in taxes (flat tax anyone). If you want more disposable income – work harder!

Posted by cjkane | Report as abusive
 

Dejavu?

http://delong.typepad.com/.services/blog  /6a00e551f08003883400e551f080068834/sea rch?filter.q=life+in+1900

@TFF paying off the students loans should be a priority, not retirement. If you are in debt over your eyeballs and unhappy as hell how can you recommend barely staying afloat by robbing yourself of today’s happiness with debt and stress, to pay for a tomorrow many moons away where that same money might even be worth much less and debt still looming large(unless the student loans have some freakishly low interest rate? (the figures I saw say they are paying high interest and making little more then interest payments) I am lost to find any financial logic.

Posted by hsvkitty | Report as abusive
 

The rich whine is disgusting. This guy may be a professor but is stupid when it comes to money. His sense of entitlement is also offensive. People like this are the ones ruining it for all. A few percentage points more in taxes will not effect this family. They need to be realistic and adjust. My son went to the University of Texas and is did well w/o going to any private schools.

Posted by dennisaa | Report as abusive
 

“Rich” does not having a good income, as this man Henderson has. If he loses his job, he still suffers and can go broke–he is just a working stiff with a better job. Plus, considering his level of education and that of his wife, he SHOULD make a good income.

“Rich” means having sufficient income-producing assets that you do not have to work and can live on the earnings from your assets. Period. Anything less is middle class, or in the case of this man, upper-middle class.

Plus, this complaining about Henderson’s “whining” misses the point–this man earns his money and is entitled to spend or invest it. On what basis do we have a claim to his money? Oh, yes, from each according to his ability, and to each according to his need. Right?

Thank-you, Mr. Marx, for your assistance.

Posted by bobw1 | Report as abusive
 

I would think that someone living within such close proximity to the truely destitute would have a much better appreciation for his own circumstance. Has this guy ever ventured south of the city? Has he ever travelled abroad? What he needs to do is volunteer some of his precious time helping Chicago’s less fortunate. Maybe once he sees how most people survive from day to day he will have a better outlook on his own life.

Posted by Cargo-Cult | Report as abusive
 

hsvkitty, if I’m not mistaken, both student loans and retirement savings are tax-advantaged. Moreover, retirement account contributions from universities commonly bring an employer match. (E.g. 9% matched with 3%.) I don’t know the details of his situation, or the interest rates involved, but it very well might make sense for him to make large retirement account contributions while still carrying the student loans on schedule.

What I would **never** advise, however, is stretching his finances to buy a million dollar home. That’s just dumb. Buy a more modest home (bet you can find something nice for $350k) and then upgrade when the student loans are paid off.

Posted by TFF | Report as abusive
 

I have a cousin who grew up in one of the richest families in the US and married a man who was the CEO of one of the largest companies in the country. By any standard they were rich and she once said “It’s never enough. The Browns have their own stables…I’ve ridden all my life and I want more than anything to have my own stables but we can’t afford it” She had the grace to laugh at herself.
The median income in the US is $23,000. One half of our population lives on less than that. Anyone making $500,000 per year, more than 20x the median income, needs a little perspective.

Posted by portia | Report as abusive
 

A $2500 tax credit per child HA HA HA HA HA HA HA. No Tax Credit for College! The Rich get Richer, the poor get poorer and the Low to upper Middle Class Pay a higher percentage of their income to pay for it.
We are putting our children, our Childrens Children and our Childrens Childrens Children in debt. Keep Digging that hole. It will eventually be our grave!

Posted by IDONTGETIT | Report as abusive
 

You know I really feel like most of the people defending the rich guy miss the point and keep missing the point all along the way. The point isnt whether he earned it so he should keep it, the point is he spends 3 times the poverty level on his retirement. Most families will live and die without ever having left the country, but these people will retire to Tuscany amid luxury (yes I said luxury). I dont particularly care if they do, but lets look at the reality here, Someone taxed at the same rate as the rich … and makes at or near poverty level, will be paying the tax with their families Christmas money or mortgage/rent. The Hendersons will be paying it with an Audi instead of a Mercedes every year. Thats a big difference. I know there are people who are at the poverty level and suffereing because they desefrve to by their own actions, but most are not. The whole Henderson family is one serious illness (not covered by their insurance) away from learning how to drive a 5 year old Saturn to public school everyday while most of us are one paycheck away from foreclosure and the homeless shelter. If I were Mr. Henderson, I would keep my mouth shut and thank god the mob was electronic.

Posted by JimInAz | Report as abusive
 

The average American income is $40,000 – $50,000 per year. This is the vast majority of Americans, our countryman. If you are making $400,000 a year, you are definitely rich. These people need a reality check. Its not about how much you make, its about how many other people make as much as you do. The ratio in America is huge. The vast majority of Americans struggle and the middle class in getting smaller everyday. Our middle class is what makes us great. The middle class provides hard working families and excellent consumers to fuel our nation. I have no sympathy for the wealthy. They are far better off than most and have nothing to complain about financially. Unfortunately, they have a warped sense of reality and the people who are wealthier than them are even more warped. Wake up people! What happened to giving back to the community? I don’t know anyone who wants their neighbor to be poor or suffer financially. Also, you don’t have to be smart to be rich, you just sometimes have to be lucky and know the right people.

Posted by Blackbird1996 | Report as abusive
 

There is never enough money for the suedo rich. They always need more and spend more than they can afford. Even the middle class, as they are called can be well off if they pay off their houses, don’t have to have new cars every 3 years, and keep toy purchases in hand. For the super rich, I do no envy them. They are normally a disaster waiting to happen and always have to look out for who is going to take their money. To be able to give back, not have serious health problems, and to enjoy each day is enough for me.

Posted by fred5407 | Report as abusive
 

““Rich” does not having a good income, as this man Henderson has. If he loses his job, he still suffers and can go broke–he is just a working stiff with a better job. Plus, considering his level of education and that of his wife, he SHOULD make a good income.

“Rich” means having sufficient income-producing assets that you do not have to work and can live on the earnings from your assets. Period. Anything less is middle class, or in the case of this man, upper-middle class.

Plus, this complaining about Henderson’s “whining” misses the point–this man earns his money and is entitled to spend or invest it. On what basis do we have a claim to his money? Oh, yes, from each according to his ability, and to each according to his need. Right?

Thank-you, Mr. Marx, for your assistance.
“————————————————

You have hit the nail on the head – rich means I have the ability to stop working if I want and won’t take a hit to my lifestyle. This man and his wife are well-paid – not rich. I am a hardcore liberal, but I find some of the comment here quite offensive. Few understand the hours of work that go into preparing for careers such as his or the amount of work and stress that can be associated with these careers. If he wants to send his kids to an expensive private school, that is HIS DAMN BUSINESS – he works hard and the decision is HIS. People that make $400k a year, don’t have a $50k lifestyle – hard work and planning has enabled them to do more, but he and his wife are, perhaps, an illness or a layoff away from dipping into savings to live and eventually taking a substantial hit to their lifestyles – he is NOT rich!

Posted by dm92 | Report as abusive
 

dm92, he has a right to enjoy his money. Nobody (or almost nobody) is disputing that. But whining about the expiry of the Bush tax cuts? C’mon! The expiry date was written in when the cuts were first passed!

Posted by TFF | Report as abusive
 

Did I understand the original story correctly; a medical doctor and a teaching professor? Well as much as they contribute to society in both ways via services they don’t actually produce anything. Society is not actually going to be in a monetary sense wealthier if they work harder. It is manufacturing businesses (farmers who export) that need assistance to produce more goods for export, more jobs will flow and then the economy benefits – tax breaks to these will assist.

Posted by kiwibird | Report as abusive
 

TALK ABOUT WHINING!!!!! IT’S TOO BAD HE DOESN’T HAVE TO LIVE ON LESS THAN HE THINK’S IS NECESSARY. I DON’T A CELL PHONE OR CABLE TV, BECAUSE I CAN’T AFFORD IT. BUT I ALSO CAN’T AFFORD TO PUT $60000 A YR TOWARDS RETIREMENT, BECAUSE THAT’S MORE THAN I MAKE A YEAR.

Posted by MUSTANGVICKI | Report as abusive
 

I am wondering how I am going to pay
my electric bill and all I hear is retirement savings accounts….
What happened to being thankfull for what you have ?
Greed has overcome america and will take it down.
Keep saving and sending your spoiled rotten kids to private schools . Maybe we should give our public school teachers a little more control to punish little johnny and you would be able to put a little more faith into the system !Parents should be held responsible for their jerk kids rich or on welfare .

Posted by Brickel95 | Report as abusive
 

ONe problem that the so-called “rich” have (yes, I am within Obams’s definition of that term) is the already overly progressive tax structure of the United States. The nonpartison Tax Foundation quotes an OECD study showing that the United States puts more of its tax burden on its high earners than any other developed country:

http://www.taxfoundation.org/blog/show/2 3856.html

And almost HALF of the U.S. population pays no income tax whatsoever:

http://finance.yahoo.com/news/Nearly-hal f-of-US-households-apf-1105567323.html?x =0&.v=1

It’s the fact that people who pay nothing want others to pay everythign that bothers many of us.

Posted by vudublu | Report as abusive
 

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