The strict answer is, "yes it does matter," because incentives matter. However, I don't think this is what people mean when they say that Bill Gates (or Alex Rodriguez or Roger Clemens or Tom Cruise) makes too much money. What comes across to me is a real (and unfortunate) emotional duress about salary inequality, probably because those in duress have less income than Bill.

For some, what Bill Gates makes really does seem to matter. For instance, if you are promoting the L-curve of income distribution. All of us plebes make up the bottom leg of the distribution and Bill Gates contributes the vertical leg. It's really not a distribution, per se, but why let that ruin the fun.

Do the people who agree that the "L-curve" is a justification for income redistribution make their consumption decisions based upon someone else's income? Do they make consumption decisions based upon the hope that Bill's income will be redistributed to them one day? Do they enjoy their Arby's Roast Beef less because Bill is worth $40B+? I hope not, but then again people are crazy animals.

I don't know how old this is, but it seems that we economists still have a lot of work to do.

(Note: the original entry has been edited - the old "revise and extend my remarks" we hear on C-SPAN)