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In the United States we enjoy an economic system known as capitalism. What is capitalism? It’s an economic system that uses private capital to produce goods and services for a profit. How do we get capital? In my mind, there is only one way to obtain capital. That’s to earn it and retain it. After we have accumulated capital, there are two things we can do with it: employ it (investment) or enjoy it (consumption).

If we choose to employ it, that initial capital will earn more capital. It will compound and accumulate, thus allowing for more employment or enjoyment. If we choose to enjoy it, we will be happy for a short time, but the amount of capital available for investment will have eroded. Once enjoyed, the capital is gone forever. Obviously, we need to find a balance between employment and enjoyment. The economic vitality of our nation depends on the investment of capital – its employment. The investment of capital is the sole driver of our economic growth and therefore our standard of living. In contemporary America, I fear the scales have shifted too far in favor of enjoyment, to the detriment of the country’s well being.

Since capital must be earned and retained, taxes play a key role in its accumulation. Economists argue that income taxes directly reduce our earnings and thus limit the amount of capital available to employ or enjoy, resulting in a deadweight loss for the economy. Taxes on income are especially hurtful as they reduce the amount of usable capital, particularly that which is available for employment. A certain amount of capital is spent on enjoyment of necessities such as food, clothing and shelter. Regardless of the level of taxation, people are going to spend money on these necessities. Higher taxes don't necessarily equate to lower consumption on things like food, clothing and shelter. It is investment that often takes a hit when tax rates rise. That is why some experts, such as former Federal Reserve Chairman Alan Greenspan, have advocated shifting from an income tax to a consumption tax.

Too often in America, profit is looked upon as an evil. Too much profit is considered greedy. But profit that is not directed toward enjoyment is, in the end, reinvested or re-employed back into the economy to seek a return on investment. That invested capital is used to accumulate more profit and therefore more capital. I find it hard to believe that in a free market there can be too much profit and that those that make it are greedy. In a free market, in order to make a profit, one must manufacture a product or provide a service that a buyer sees as valuable, at a price that a buyer is willing to pay. If those elements are not present, goods or services would not be sold and no profit is earned. How can it be considered greedy if those elements are present and enormous profits are earned? If profits are excessive, the free market will produce competitors with better products and lower prices.

The only time greed factors in is when one party simply takes another party’s wealth or accumulated capital without providing a good or service at a price that the other party is willing to pay. Greed is the accumulation of more than one needs or deserves. Based on that premise, it is only our government that is greedy. We have no choice but to accept the services that they provide and no control over the cost of those services or the efficiency by which they are provided. They provide services, many of which we do not even want, and simply take our money in the form of taxes to pay for those services. That is greed in its most basic, naked form.