How concerned should we be about rising income inequality?

I basically agree with Lane Kenworthy here, who argues that claims of the dire consequences of income inequality for other social desiderata are often overstated. Many of the arguments against income inequality that are floating around these days would work better if they instead targeted poverty, or inequality of opportunity, or racism, or barriers to full political participation. Instead, there are shaky claims that inequality in itself is bad for economic growth, opportunity and mobility, health, democracy, etc.

The best argument against income inequality qua inequality is, in my view (and Kenworthy's as well, I think), based on some version of fairness or justice theory. Most days my version is pretty much garden variety utilitarianism, backed up by a Harsanyi/Dworkin style argument from behind the veil of ignorance. The worst thing about the rich getting richer is, basically, that there are much better things that society (we the people) could be doing with rich people's money than they are choosing to do with it themselves (Bill Gates is an outlier, remember). "But it's their money!" you reply? No it's not... but that's an argument for another day...