First of all, yes, consumption is almost always preferable to &quot;letting your money work for you&quot;. Contrary to what you seem to think, most people who have more wealth than they need for consumption, don&#x27;t use that wealth to fund new ventures. Instead they mostly just own assets that appreciate in value and&#x2F;or pay a dividend. They do not create new wealth to any significant degree. While it is true to some extent that having money in the bank can help create new wealth, it makes no difference if it&#x27;s one person putting a million dollars or a thousand people each putting one thousand dollars in the bank. The result in either case is that the bank can lend out a million dollars to someone starting a new venture. I mention this because when one person spends (consumes goods) a thousand dollars say, that money goes out if her bank account and into someone else&#x27;s. The bank&#x27;s ability to lend out money is unaffected. Meanwhile, thanks to the power of capitalism, money that is spent flows towards what society in aggregate deems most valuable, ensuring that more effort is spent on creating more of that valuable thing. This is in a nutshell why it&#x27;s preferable for all, poor and rich, to prevent rampant inequality.<p>Secondly, I do somewhat agree that we shouldn&#x27;t disincentivize investment or saving up. I am not familiar with the US tax system, but in some countries you can defer paying taxes on what you put into a pension plan until the time when you collect your pension. If the interest you earn on your savings is more than the inflation, this is a win&#x2F;win situation: You will earn interest on a larger amount, and society will collect tax on a larger amount in the end too. I could probably be convinced that it would be a good idea to make all investment and savings tax free <i>provided</i> that all dividends as well as any amount liquidated was taxed as income. Buy a house? Fine that&#x27;s tax deductible. Sell a house? Get taxed on the entire amount as if it were income.