In a moderate sidetrack but still relevant, a significant part of why people are against capitalism is because they believe that accumulation of wealth is hoarding. I use to believe this as well. The idea is that wealthy people use a smaller percentage of their wealth than non-wealthy people, which decreases the overall cycling of resources through the economy. This would be totally true if the premise of hoarding was true. But it's not. Wealth hubs, even those of *gulp* Paris Hilton, play an integral role in the health of the economy. I can't explain how because this is high level economics, but it basically has to do with savings rates and investment capital and the million things those two affect. "Hoarding" is a hugely popular media item, and virtually everybody believes it's something that happens. But it doesn't happen. Money is virtually never hoarded. It all plays some sort of role in the aggregate

With this in mind, we can address the next tier for the anti-capitalist: hoarders should be taxed (it's free money because hoarded money isn't used for anything!). Again, if the hoarding concept was true, this would be true, but the hoarding assumption is false. A strong tax code doesn't look to extract more from the phantom hoarders, but looks to consumption. The money that "hoarders" get comes from consumption anyways, so consumption taxes aren't leaving them out. With consumption taxes, business owners (who are the main savers and investors) can maximize their efficacy in the economy, but if instead of consumption taxes their "hoarding" was taxed, we would just end up with a less stable business structure that depends more on rampant consumption to keep it running. It's ironic that the really hippie liberal types rail against consumption culture then turn around and promote taxation that would increase the consumption culture. They should be praising the savings culture.

As for how the welfare state fits into this, I don't see how it's a problem to have the majority of tax revenues that pay for welfarism to come from those who reap the benefits of welfarism. Perhaps the tax code has to be moderately progressive to achieve this, but I have a feeling it doesn't. The welfare state applies to almost all income levels, and that dynamic alone may provide the revenues needed to provide for all income levels. Regardless, even most ardent free market capitalists believe in progressiveness of the tax code. Also, income inequality is the wrong way of looking at things. It doesn't really mean anything. If we doubled the amount of millionaires in the US, inequality would increase, but the economy would do far better

So why don't we let the markets be the markets, tax consumption, and make a welfare state that allows people who wanna work harder, work harder?