Saturday, September 4, 2021

Fwd: meritocracy


---------- Forwarded message ---------
From: John 
Date: Sat, Sep 4, 2021 at 6:07 PM


Although I feel like I loosely addressed some of your concerns, I think that I should be more specific:

There are a great many statements thrown around about the wealthy that are at best half-truths.  These seem like stereotypes.  

Wealth tends to not be multigenerational.  This is probably due to human failings.  You can find exceptions where you have some dynasty families, but when you get more than like 3 generations then wealth tends to get diluted or lost.

People move in and out of financial classes all the time.  It is one of the advantages of a free market is that people have financial mobility.

If you were to look at political power, that seems to rest with corporations.  When it comes to wealthy people, there are a ton of leftists billionaires who donate to left-wing causes.   Mark Zuckerberg gave 350 million dollars to local election boards with strings attached usually requiring that they alter their rules.

Corporations are not the same as rich people.  Many people own stock, myself included.  A few decades ago, the largest investor in Exxon was the Chicago Teacher's retirement fund.  Because of the development of the 401K, the majority of corporate ownership has been in retirement funds.

The great myth promoted by the left is that the rich don't pay their fair share in taxes.  Tax law is complicated, and much depends upon what type of taxes you are talking about.  In terms of income taxes, the system is very progressive.  Actually, the bottom half pays almost nothing.  When you compare taxes paid minus government benefits received, the system looks more progressive, with many people in the bottom half getting a net gain.

What is often misunderstood is capital gains.  If I get a dividend from a company, that company has already paid corporate taxes on their income.  Until recently we had the highest corporate taxes in the world, and I have heard that Biden is going to return us to that.  Capital gains on investments are usually lower than the top income tax rates for that reason.

We buy products based on merit.  For every successful song, there are about a thousand unsuccessful ones, mainly because they are not as good.  We should be grateful that merit determines success because it provides incentives to do well.   


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