I share your general concerns that, for many years now, there has been a significant shift in wealth distribution toward the top. And much of that is for the “wrong” reasons. The playing field is becoming less level and that is bad for everyone in the long run.
But I disagree with your general conclusions about the effectiveness of capitalism. It does work quite well, when it’s done right.[/quote]
Just a cursory look at the top 20 shows quite a few are heirs to fortunes, not self-made…and I don’t have a problem with that. I do not favor estate taxes (perhaps over $5MM, and very progressive), but think we ought to focus on raising capital gains taxes (and taxes on other investment income), as this is how wealth is concentrated.
Contrary to popular opinion, inheritance does NOT concentrate wealth, as most inheritance goes from one person to a number of people/heirs. Inheritance dilutes wealth in most cases. However, when you have large amounts of weatlh earning dividends, interest, and cap gains **and you tax it at a LOWER rate than productive labor** THEN you have a further concentration of wealth that is not “earned.”
We have to decide if we want to continue rewarding gambling and speculation over productive labor. As it stands, our tax structure (not to mention our short-sighted trade policies) is pushing everyone into “investing,” rather than working. This is not sustainable over the long run.
I don’t have too much of a problem with capitalism, if only we could find an actual example in the real world that is devoid of corruption and monopolies that eventually lead to the implosion of an economy, with the poor being made to suffer for the benefit of the wealthy. This is where we stand today, unfortunately.
