Washington grew hemp. Not marijuana.
The wealthy often store their capital in ways that do not, in fact, generate further economic activity.
When you purchase a stock, you're transferring capital to another individual (who may or may not spend it). However, owning the stock does not create jobs, or provide the company with any additional capital. All it does is sit there, until you are ready to sell.
Purchasing a home will generate some economic activity at the time of purchase. However, obviously people are hoping that it will appreciate in value much faster than whatever you've put into it, based not on economic activity generated by the home, but by an assumption that supply will drop and/or demand will rise.
Arbitrage, shorting stocks, credit default swaps, some derivatives, and other speculative vehicles also produce minimal economic activity. They do offer some benefit (primarily by increasing liquidity) but if you get rich off of exploiting differences in currency rates, you're not creating jobs.
Art, jewelry, collectibles, autos generate a little activity, but a Picasso doesn't appreciate in value over time because it's generating economic activity and providing someone with a job.
Economic rents are generally seen as negative for everyone except the rentier. E.g. patent trolls aren't creating jobs, in fact they may be hindering entrepreneurship by threatening innovators.
In contrast, buying bonds generates economic activity, because it's lending the capital to someone who is going to use it. We should note that the secondary market doesn't really create jobs, though it does help the market by enhancing liquidity.
lol... No, inheritance isn't earned by the inheritor. How silly.
Income inequality has not been static. It was very high in the Gilded Age and rose to a peak before the Great Depression; it fell in the 1940s through 1970s; then, when Reagan slashed taxes on the wealthy, and CEOs decided to award themselves higher pay. There is a lot going on that has nothing to do with merit, and a lot to do with policies and self-dealing.
The wealthy can provide a huge range of advantages to their kids. They can afford high-quality education for their kids (without crippling debts), which enhances the personal networks that are critical for success. They give their kids excellent nutrition and medical care. The kids don't have to grow up in constant fear of crime, or subjected to asthma-inducing pollution. They can handle a $1000 emergency or being out of work for 6 months. Even the biggest screw-up can be prevented from blowing all their assets, if the parents set up a trust fund with halfway decent (i.e. non-embezzling) trustee.
We see this in mobility statistics in the US. If the only factor in economic success was merit, then we'd see something close to perfect mobility -- i.e. everyone has a 20% chance of ending up in any of the income quintiles. That's not what happens in the US. Instead, the top and bottom are "sticky" -- someone born in the top 20% or bottom 20% is highly likely to stay that way.
The idea that America offers "equal opportunity to all" or "it's all up to the individual" is not reality. It's a myth.
The problem with the "philanthropy" argument is that the wealthy are getting wealthier that before, because of tax cuts. Instead of the public having some input on how we allocate resources to public goods, it's controlled by a small group who got wealthy, in no small part, because they figured out how to manipulate and alter the tax code to their advantage.
They also pay more in taxes because they are capturing all the income gains.
sigh
Taxation is not theft. Income is not a function of willpower. And yes, there can be lots of external reasons why someone might not be wealthy.
