University of Chicago Professor Todd Henderson has found himself in the curious position of being the focus of a national debate over tax rates — and his family’s finances. The corporate law professor wanted to show that people making more than $250,000 a year are not super rich and indeed can be struggling in this economy like other families. The response to this argument on his blog was fast and furious — leading Henderson to shutdown his blog and decline further commentary.
Henderson is a neighbor of President Obama in Chicago and decided to open up his own finances to show that people in the top tax bracket are not super-rich citizens with large surpluses of money. He wrote “[a] quick look at our family budget, which I will gladly share with the White House, will show him that, like many Americans, we are just getting by despite seeming to be rich.”
He detailed how he and his wife, a doctor, paid $100,000 in federal and state taxes last year and $15,000 in property taxes. He explained that they carry $250,000 in student loans and that they do not have a large amount of excess cash.
You can certainly disagree with his view but the response was vicious and unfortunately all too common for blogs. People deluged the blog and his email with hateful comments. This increased when a business site reportedly estimated the combined income of the Henderson’s at over $400,000.
Henderson complained about an “online lynch mob” that sent messages like “die yuppie scum” and other threats. He said “[t]he consequences are devastating for me personally” and shutdown his blog.
I have long complained about the uncivil nature of discourse on blogs. Anonymity seems to unleash mean and petty impulses among some people. One can certainly disagree with Henderson’s view that $250,000 is not the real line of demarcation for the super rich. Many have made this argument and he was not denying that he is well off, but rather that he is not so wealthy as to be set apart with people who are making huge sums of money each year. That brought other academics to the forefront in sharp but civil disagreement. Prof. Bradford DeLong of the University of California at Berkeley insisted that “[b]y any standard they are rich. But they don’t feel rich.”
The problem are those people who want to immediately take the debate into name-calling and threats. I happen to think that the disclosure of his own financial details was offering a new context for this debate whether families making $250,000 or more are worthy of consideration in the tax cut debate. This debate has been maintained on generalities and it is a good idea to look at actual families above this tax line. Perhaps the Hendersons were not the best example, but it was the only example that Henderson could give on his blog.
I hope that Henderson will reconsider and restart his blog — and that people will show a level of civil restraint in participating in this and other debates.
Sources: Fox
Jonathan Turley
I’m with Bill Maher on this one:
http://www.huffingtonpost.com/bill-maher/new-rule-rich-people-who-_b_737429.html
Two Hundred Fifty Thousand Dollars In Student Loans???
Give this guy a gun to wear on his hip and a hat with tea bag fringe for his head … as for his ability to make “superior” decisions, there is a word for such an exaggerated sense of one’s own worth or importance and it ain’t patriot.
“Sources: Fox”
Better source: Google’s cache
Read his whining, and then the Fox noise machine story again. My sympathy for this fool dropped through the floor. And if it’s even possible anymore, so did any respect for Fox.
I suspect most of you have not read his post, only the Fox story about it. He threatens the Mexican guy who cuts his lawn, the Polish woman who cleans his house, the art school he sends his kid to, and his cellphone company. He thinks he is a patriot for owning stock. He complains of his taxes funding public education when he sends his three kids to private schools. “What is the theory under which collecting this money in taxes and deciding in Washington how to spend it is superior to our decisions?” he asks. Uh-huh. “Ask the entrepreneurs we employ and the new arrivals they employ in turn whether they prefer to work for us or get a government handout.” (This is under the theory held by the affluent that people dislike government handouts for being shameful rather than inadequate, so that dollar for dollar they aren’t as appealing as having worked for the money.)
The comments underneath weren’t “vicious” and “all too common for blogs”. (It figures he calls them “blogocane”.) I can only hope his wife strangles him for this.
Blouise, good comment.
What he actually wrote was: “Our combined income exceeds the $250,000 threshold for the super rich (but not by that much)….”
Source: http://delong.typepad.com/sdj/2010/09/todd-henderson-we-are-the-super-rich.html
I have no idea how long this gentleman maintained his blog but if it was more than a couple of months then he must have been aware of the length to which certain bloggers will go.
Although an income exceeding $250,000 but less than $500,000 is certainly not an indication of wealth, it does imply an upscale lifestyle which would include objects worth stealing … foolish to advertise it on the web.
According to the US Census Bureau, in 2005 the median household income was roughly $46,000. At the suspected $400,000 income, this man’s family is making almost 10 times the amount of the average American family … he wants tax cuts … what he needs is common sense.
What EVERYONE forgets is that the tax is on $250,000+ of the ADJUSTED GROSS INCOME, the amount you make AFTER the basic set of deductions (children, etc.). In fact, the tax is calculated AFTER deductions. Thus, most people who make $250,000 and has a mortgage, kids, give to charity, etc, will NOT be in the higher tax bracket.
I cannot find the report, but one of those think tanks said that the $250,000+ tax increase will actually kick in when the average person makes more than about $320,000.
The problem with the political debate in this country are the reactionaries on both sides that do not think beyond the words. Stop reading the words and think about their meaning and stop abrogating your brain to these pundits. Reconnect the brain to your mouth and your brain to your fingers before commenting. Maybe we would have a better political discourse!
The primary arguement for keeping the Bush top tax rate in place is that allowing the tax breaks to expire would impact jobs. I see no jobs being created by allowing the Hendersons (corporate law professor and doctor) to get this favorable treatment while the country is mired in the debt those breaks helped considerably to create.
Allowing those tax breaks to expire will effect few Americans, but will benefit all. The upper 1%-2% of income earners includes hedge fund operators, corporate CEO’s, many in the entertainment industry celebrities, film writers/directors/producers and a lot of lawyers, etc. I don’t see many, if any, additional job creation coming from those sources as a result of tax breaks either.
So, how about small businesses? Well, statistics indicate 97% of small businesses do not make $250K pre-tax dollars. And those that do, assuming a modest 4% pre-tax return on sales, would have sales revenues of over $6 million. That’s after all expenses, salaries, officers’ bonuses, travel, car payments for owners, etc. At the same pre-tax rate, growing the profit to $350K and thus costing that small business owner a paltry extra $3000 of taxes, would require a sales revenue increase of $2.5 million. Besides, the government has provided a %5000 tax CREDIT for each person hired and same-year depreciation of any capital expenditures for 2011.
No sympathy.
This should be a lesson to Mr. Turley and all bloggers, don’t whine about your hardships when you have chosen to live at that level.
There is too much discrepancy in incomes today to think others are going to care that you may be as broke as anyone because your expenses are putting you there.
Perhaps the overreaction to Henderson’s post was decidedly uncivil and wrong. However, there are many many millions of people in this country whose income never approached even $100K, that would not be able to sympathize with this man’s problems. In my own case I never in my working career made it into 6 figures. My kids, both smart, had to go to Public Universities, since I couldn’t afford private ones. Nevertheless, there was considerable debt in student loans for each which I am voluntarily paying off. I have no doubt that my kids are every bit as deserving as his kids to the benefit of a prestigious education. It is his income that makes the difference and his lack of realization of this brands him as selfishly ignorant.
Chis’ point though is the most salient. The biggest tax discrepancy in the US is the FICA taxes, which are co-mingled with all government income and whose cutoff falls heavily on the less affluent classes. It was indeed a legacy of the Reagan years and continues to represent a duping of the public that the media gives short shrift to.
Finally, Mr. Henderson has no realization of what a fortunate man he is compared with the majority of Americans. That lack of realization exposes him for the limited thinker he is.
So long as the dollar remains the pornographic centerpiece of American thought, Mr. Henderson can expect to feel the heat. The choice to live in a house requiring $100,000 per year in taxes, as well as the choice to carry $250,000 student loans make these people poor victims. I do not have any sympathy for them. It was an arrogant, condescending hammer-blow disguised as “opening our finances to show we’re not rich.”
No one is entitled to own anything. Nor does ownership elevate you as a human being.
That they have received torrential blowback during a deep recession was completely predictable. Blaming anonymous posters for the Hendersons’ dumb decisions is pointless. Might as well blame the wind because it howls.
I have no problem with anonymous anything. I post my real name and e-mail address here, and who gives a fig? That’d be nobody. Besides, I could be lying and there’s no way to prove it objectively through just me. Like everything else we encounter online, if its not backed up my independent sources, it’s probably piffle.
This post included.
There are so many that think it is their right to overpower others. It all started with the shouting at the cameras a sporting events. That seemed to be the time when a younger generation wanted to communicate: “In your face!”. I must admit, I don’t understand it. I thought it was a fad and would have been gone by now.
Henderson is not coming back to this discussion of his family finances any time soon, if ever, according to this post.
“The posts that generated an unintended blogocane have been deleted. I stand by the posts, the facts in them, and the points they were making. The reason I took the very unusual step of deleting them is because my wife, who did not approve of my original post and disagrees vehemently with my opinion, did not consent to the publication of personal details about our family. In retrospect, it was a highly effective but incredibly stupid thing to do. The electronic lynch mob that has attacked and harassed me — you should see the emails sent to me personally! — has made my family feel threatened and insecure. We recently had a very early preemie, and this was a quite inopportune time to bring this on my family. For the record, I still think the planned tax increases will negatively impact my family and my country, but that is basically all I should have said. To my wife, my three children, and to anyone who was offended by my remarks, please accept my apologies. To those with pitchforks trying to attack me instead of my message, I feel sorry for you. You have caused untold damage to me personally. I may be wrong, even stupid, but I don’t think I deserved that.”
http://truthonthemarket.com/2010/09/20/im-sorry/
The professor is very smart and educated, but on this occasion was very foolish. He could have posted a hypothetical budget of a fictitious family instead.
There are some good rules for the internet that all should observe.
One, do not compare someone to Hitler, because you lose the argument.
Two, for controversial statements, compose them offline and sleep on it overnight before posting.
And three, for anyone who is married, who used to be married, or is even thinking of ever getting married to a spouse, DO NOT EVER EVEN THINK OF POSTING YOUR FAMILY INCOME ON THE WEB WITHOUT CHECKING WITH SAID SPOUSE FIRST, YOU MORON!(facetious statement made with humorous intent with no malice whatsoever).
I am reminded of the old psych-econ fable. Able finds $20 on the sidewalk, and is overjoyed.
Baker finds $100, but Charlie sees it at the same time and claims half.
Baker is despondent because he has “lost” $50, even though he is $30 richer than happy Able.
There was a really good post by one blogger. If you are not the lead dog, the view is always the same.
As Einstein said, its all relative.
Ps, since the prof did not reveal his “budget” or a “net worth’ statement, but simply related some selective excerpts from the family finances, it is difficult to judge his situation, so I will not. But an awful lot of posters noted that a tax increase on income ABOVE $250,000 cannot possibly affect a family with income of ONLY $250,000.
The quote above was closed improperly and blends a citation from The Boston Globe with my own thoughts.
The portion of the quote following the first paragraph is mine, and not the Globe’s:
Newspapers and bloggers should be able to choose their own standards and threshold for discussion.
That said, anonymity broadens the contributor pool, invites individuals with inside information to participate where they might not with a real name, encourages directness, and allows outstanding ideas to shine regardless of the name of the poster.
The real name “James Smith” provides substantial anonymity. The same policy applied to a unique named will identify the individual down to the person. Therefore real name policies ask different things of different people, may not civilize the discourse, and discourage participation.
The Boston Globe explored the behavior of anonymous online posters earlier this summer.
Hmm…25% flat tax….I like the ideal…no deductions….
I read the clowns original post – he did not deserve “die yuppie scum” but it was obvious to me that he was asking for it. His whine was based in large part on his expenses, which included many things people not making 250k+ can even dream a bout let alone whine about the cost of. His insensitive and ignorant rant got an awful reaction that a ration person would have foreseen.
Chris – you hit one of the nails on the head. Back in the reign of St. Ronnie there was a large increase in FICA to help offset the excessive cuts on income tax. This falls most heavily on lower incomes & this clown avoids it on most of his income. I’d be willing to make a trade off: keep the current income tax structure in place but remove the limits from FICA, tax every dime.
Chris:
good point on the social security. Most people in that tax bracket probably end up paying between 15%-25% depending on their deductions for federal tax alone not including state taxes, property taxes [including realestate], local taxes and sales taxes. I added it all up one time and my wife and I were paying about $60,000 in all those taxes and we earn nowhere near $250k. I was floored it was over 35% of our income.
I could have hired an employee for that amount of money or bought a new car or appliances for the house or a vacation home or saved it, and people wonder why unemployment is high.
Taxes do not create jobs, production does. And robbing Peter to pay Paul (stimulus) does not create jobs.
One thing he does deserve is to be treated in a civil and decent manner.
It is good practice because if we do not get a handle on civil discourse at a personal level, eventually it works its way into government, and then we have nations at odds with one another in a dangerous manner.
Civil discourse and respect are good for civilization.
http://blogdredd.blogspot.com/2010/09/embryonic-look-at-civilizations-future.html
I don’t know if he addressed this in his blog but the difference in tax would be on income -over- 250k. It’s the same for everyone under $250k (under the limited extension). And it’s just a few additional points for income over $250k.
At the same time that income is far above the FICA tax cutoff. That’s a not-inconsequential point since most people pay more to FICA than state and federal income tax. I think the cutoff is around 70-80 adjusted gross income (that is, after mortgage deduction.) Most people don’t notice it since they only see their contribution, not both theirs and their employers. You should count both since an employer would (in theory) offer the difference in salary and/or benefits if it didn’t have to go to FICA.