I'm rich and part of the financial 1%. I can indeed confirm the rich get richer. I'm not going to enumerate the specific methods, but I do feel bad that middle class or bay area software engineers cannot employ certain financial tricks that only the rich can do.
As a teaser, one important thing is to not share information (i.e. Don't blog about financial "hacks"). Call it a corrupt moral compass or whatever you like, but the fact is this behavior is rampant.
I think it is education the is the biggest differentiator of this generation and that boils down to school district (and everything this entails race, wealth etc).
That something so important is decided at an early level of one's life that has wide reaching implications is quite frankly a disgrace.
Only the most endeavours break the cycle and they are too few and far between that are not really encouraged on most levels of society around the world due to the norms.
to anybody curious about this dude's 'financial hacks' - just hire an accountant
the vast majority of financial tricks require scale (of capital) - e.g. itemized deductions, business expenses, even tax-loss harvesting - but they aren't secret!
The tricks you mention are only about avoiding taxes, I wouldn't call those "rich getting richer" tricks, I'd call them rich preserving their capital tricks. Rich getting richer is more along the lines of hearing about investment opportunities while golfing with your banker, insider trading, having the capital to play in certain markets that only big money is allowed to play in, being able to take huge risks. Angel and VC investing being in that last category.
Capitalism is around 200 years old. Most of the extreme income inequality in the States has been going on for only around 30-40 years or so. So I don't think you can necessarily blame only capitalism for this.
Also, I don't think anyone knows the exact causes of this growing inequality - some libertarians, for example, would argue that it's excessive regulation that is causing part of the problem - which isn't capitalism, it's the opposite of capitalism.
But most importantly, note that I specifically talked most strongly against the idea that only the rich get richer. Just as an example, how many of today's billionaires are relatively new to the game? It's not all of them, not by a long shot. And while some minimum level of "being rich" is certainly a factor (in the send that everyone who lives in a 1st-world country is rich), there are lots of people on that list who started with relatively little.
http://www.latimes.com/business/hiltzik/la-fi-hiltzik-ft-gra...
On growing income inequality and the transfer of wealth to the 1%.
You can argue if it's right or wrong but it's a bit of whopper to say it doesn't happen.