I am beginning to think much of the concern over income inequality is unwarranted for many reasons…

1. If the economy were a zero sum game, then income inequality would matter, but its not. So that being the case, how many people for example would rather take a 5% pay cut knowing the wealthy were taking a 15% pay cut rather than getting a 5% pay increase knowing the wealthy were getting a 15% pay increase. My guess is the vast majority of us would opt for the pay increase and then resent the wealthy got more.
2. I believe the income inequality of today is largely a function of intellectual property often in the form of software. Because the marginal labor cost of producing additional copies of software is approaching zero, while the value proposition tends to remain unchanged, the sheer act of selling millions or billions of copies of software in some from is creating huge wealth. And while the people getting that wealth do live “princely” lives, so what? If their lives are the product of me buying a product from them that was in my mind fairly priced, then so what. Who knows how many others their example will inspire to produce other products I like.
3. I have no issue with a progressive tax system as a means to raise government tax revenue, but I strongly oppose it as a tool of “social policy”. When it crosses over into the latter category, it almost like saying you don’t deserve to be as wealthy as you are… and I simply do not think that is anyone’s right, if the person earned their wealth honestly.
4. The wealthy do provide valuable benefits to all of us. First, they pay a disproportionate share of the taxes even relative to their wealth. Second, they give money to important things that our government does not including the arts and various charities. Third, they invest in new businesses that create jobs. I am not saying they are “angels” only that we all benefit by the fact that we have wealthy people in our society with extra money to give away.
5. A large number of the wealthy will give a large portion of their wealth to various charities during their lifetime or upon their death. In other cases, their heirs will lose the fortune their parents left them, so unlike the past where wealth was largely in the form of land and passed down generation after generation… the grandchildren of today’s wealthy many not be much better off than you or I. So why when many of us play the various state lotteries hoping to become rich, do we resent those that became rich providing valued products and services.

For now our economic system seems to be working pretty well. While its easy to talk about the good ole days, I really think these are the good ole days. And there are better “good ole days” ahead as long as we remember to preserve the ability for those with great ideas who are willing to take risks to become wealthy. Once we eliminate the ability for fortunes to be made or simply take them away, I think our society will suffer for it.

So while like everyone else I allow myself on occasion to feel some envy for those who go through this life with the best of everything, most of the time, I am just fine with that fact, because I know that it is that very system that allows for winners and losers (with the vast majority of people doing okay), that challenges us and in doing produces an overall result that is far better, than one that produces only losers…