His argument is that dynastic wealth doesn’t persist in the United States. If it did, then wealth would STILL have accreted to renters even if most of the wealth was created since the 50s.
Furthermore you didn’t bother reading or noticing that he is in favor of an estate tax.
America doesn't really have people who've been billionaires for 7 generations.
But America does have people who were born into enough money to never have to worry about finances ever, had children with the same benefit, and had grandchildren in similar circumstances. Plenty of people in politics are the son or grandson of a line of rich politicians. Plenty of comfortable millionaires got their start from a lineage of inherited wealth.
It's not enough money to rank on Forbes 400 and build private castles that'll last centuries, but it's definitely wealth and status being passed down. It's safe money. Many people who became billionaires aren't there through safe, steady, risk-free financial management.
Even if you ignored inflation, how much cash would someone have to accumulate in order to sustain a middle-class lifestyle for their family for multiple generations, if they weren’t investing and managing those investments?
- Marrying well i.e. marrying smart and successful people so that your progeny’s genes are the best they can be.
The British aristocracy was famous for doing this. Marrying old blood to new blood. However, many cultures do the same. That is why marriage was so often a negotiated affair.
The problem is not that some people have all their needs and wants met with plenty left over. The problem is that some people do not, and there are systemic and often-insurmountable difficulties in moving people from the latter category to the former.
A tax on consumption will have a bigger impact on less wealthy people whose income is spent towards basic needs, whereas more wealthy people hoard their capital (and profit out of it). I fail to see how a focus on consumption should be favored?
Its quite useful in bank accounts because those banks make loans to businesses, which secure the loan with collateral and invest the loan in expanding their business, offering more goods and services at more competitive prices, Thereby generating more value. This is investment.
> A tax on consumption will have a bigger impact on less wealthy people whose income is spent towards basic needs
Perhaps so, but taxing investment also hurts less wealthy people to a greater extent, because they have less money to invest and so the investment tax makes it more difficult for them to catch up to more wealthy people by investing.
> whereas more wealthy people hoard their capital (and profit out of it).
This is why they are wealthy and this behavior should be emulated by the less wealthy if they wish to have more money available for consumption in the long run.
> I fail to see how a focus on consumption should be favored?
Because the aggregate effect of tax incentives shapes the market and investment increases the amount of value created by a given unit of labor, and the amount of value available in the market at all price levels. Incentivizing consumption (by taxing investment more than consumption) causes more people to consume more of their value. Incentivizing investment causes more people to invest more value, creating more aggregate value.
His point on 1780 rentiers just doesn't hold since most of the wealth in the world was created since the 1950s.
Also, Bill Gates's favored solution, a tax on consumption, will not do anything to counter the problem of exceedingly wealthy people who have so much money that they can't spend it all, even with a "lavish lifestyle".