Most estimates are only 20-30% of wealth in America is inherited, ex ‘Inheritance and Wealth in America’. Typically, if you have kids and much sense, you DON’T give out a lot of inheritance early (say, to kids in their 20’s), as it often results in lazy offspring. The best small business owners I’ve worked for start their kids out doing menial/manual labor at a young age, not in the executive office.
And I would disagree, some wealthy families and individuals believe in free trade and small government; others believe in a larger role of the State. e.g. the Koch brothers have a very different view than, say, George Soros. And many rich stay largely out of politics.
MG-Tower: YES, we need to greatly reduce corporate income taxes. And have a simplified tax system without loopholes. That will increase exports and economic growth. High taxes and onerous regulations, do not favor small business entrepreneurs.
FreeGhost: You state heavy manual laborers don’t make as much as they ‘should’. How much ‘should’ they make? Capitalism does NOT ‘encourage cheap laborers to increase net profits’. Capitalism encourages *efficient* production. Is someone working of their own free will being ‘exploited’? Or am I being ‘exploited’ by working 45 hours a week and paying 40% of my income in taxes, much of it paid in transfer payments to the significant fraction of Americans who choose NOT TO WORK? If I own a company, I cannot simply increase wages; I must also increase product price to cover my newly-increased production costs; that, in turn, decreases sales.
One aspect of economics not often discussed is the Rise of the Rest; in past, we had the Rise of the West; now we have the Rise of the Rest — income inequality between the U.S. and Asia, is *dropping* as these countries experience fabulously high economic growth. We could have high growth too, but we choose not to — we choose big government, high taxes, excessive government expenditures on transfer payments and military adventurism, onerous regulations, immigration limits, deficit spending, high personal debt, and fiat currency instead.
Let’s take a concrete example on wages. The public decides the minimum wage isn’t a ‘living wage’, and doubles it. What does this DO? Well, if companies must now pay so much for labor they cannot sell as much of their product at the newly elevated price point required, there will be *layoffs*. Somebody has to govern what is produced, and how much. It can either be demand-driven (free market), or command & control. In the West, we have a mix. So, take agricultural subsidies — government payments not to grow crops, price supports, etc — they cost around billion a year to taxpayers http://www.economist.com/news/united-states/21643191-crop-prices-fall-farmers-grow-subsidies-instead-milking-taxpayers — distorting the market and decreasing efficiency. So we pay a little more for groceries each week.
As for you paying a hundred dollars for shoes that cost one dollar to make, I don’t believe they are manufactured for that little; it’s probably closer to thirty six dollars — see http://solecollector.com/news/how-much-it-costs-nike-to-make-a-100-shoe/ for typical breakdown — pie chart is interesting — as for me, the only shoes I pay that much for are Red Wings, at about one hundred and eighty dollars ea (heavy-duty steel-toed work boots; my employer only covers about a hundred and sixty of it annually). I actually CAN buy American-made shoes at a Red Wing, it adds about another hundred dollars to the cost (Heritage Collection). So American-made high quality boots are around two hundred and fifty to three hundred dollars a pair. I don’t buy Nike, Air Jordan, etc because I’m not trendy & I don’t keep up with the Jones’s, so no one hundred and twenty dollar tennis shoes for me. I’m not a brand-slave; I buy Red Wing because they’re not trash and they LAST.
FreeGhost 4 years, 4 months ago.
