You mis-understand the fallacy. “White supremacy” means that if you are white, you don’t have to be smart or talented. You don’t have to strive to make good grades or achieve athletic prowess. You are privileged because you are white. It’s not a myth. It’s just plain idiocy, as is the fallacy that blacks cannot be racist because they’re inherently oppressed by white supremacy, or that blacks and whites are born with their respective political outlooks, and cannot alter them, even if they want to. And if they profess to an ideology outside of their inherent one, they cease to be black or white. It’s all pernicious, evil gibberish, inimical to any sort of meritocracy or free thought.
Yes, you are right on all points. The sooner we stop dividing people by race, the better. Why race has to be mentioned in police reports? For one thing, there are very few people of pure race. 99% of African-Americans have some caucasian blood. Only thing which should count is your merit, your desire to work and if you commit any crimes.