In the United States and throughout the world, income inequality is growing. While some degree of inequality is inevitable and even beneficial, inequality for reasons unrelated to personal merit is often problematic. In one example, investors do not share the same opportunities. The rich have many more options to build wealth than the poor do, in addition to having more resources and commonly more financial education. While many of these problems cannot be solved by governments, political leaders can limit income inequality and encourage investment.
By Mark D. Harris
Income inequality is not necessarily an evil but rather can be a motivator. It can be a fair reward for labor. However, extreme inequality of income and net worth, especially when unrelated to personal effort, is a vexing global problem. Television, the media, and social media highlight the differences between those who are too rich to drive and those who are too hungry to walk. Entrenched money holding, greater financial opportunities, and increasing societal complexity make the problem worse.
As income disparities have increased, certain individuals and organizations have accumulated sums of money unimaginable to most of the world. These hyper-rich private actors can shape the economic system, sometimes to the detriment of other people. Wealth consolidation can be a social good by motivating people to work hard and contribute to society at large. Extreme wealth consolidation, however, raises resentment, feelings of helplessness, and social instability. Though completely unjustified, the murder of UnitedHealthcare CEO Brian Thompson and the lionization of his alleged killer, Luigi Mangione, is an example.
The US Financial System
A century ago, the American financial system included a few basic institutions:
- Organizations that provided goods and services, such as farms and factories.
- Organizations that provided capital, such as banks.
- Markets that brought parties together, whether a farmer’s market or the NYSE.
- Non-profit organizations such as churches, schools, and community social organizations.
- Individuals and families, who were the ultimate producers and consumers of goods and services.
- Government
While these institutions are still predominant, private capital has mushroomed in value and importance.
Another notable part of the US financial system is the tax structure, noted below at 2024 rates.[1]
| US Tax Type | Percentage |
| Individual Taxes | 45.3% |
| Social Insurance Taxes | 21.9% |
| Consumption Taxes | 15.7% |
| Property Taxes | 10.6% |
| Corporate Taxes | 6.5% |
| Other | 0.0% |
Value Added Tax (VAT) and sales taxes are consumption taxes, and the biggest component of individual tax is the income tax.
The Rise of Private Capital
Today, private capital has become a major source of loans and investment, in many cases displacing traditional banks. Private investors, both individuals and institutions, can capture public companies. An infamous example occurred in 1989 when the investment firm KKR bought the publicly traded company RJR Nabisco in a hostile takeover.[2] In response, economist Michael Jensen predicted the decline of the public company in the Harvard Business Review.[3] What are some differences between public and private companies?[4]
- Public companies trade on major stock exchanges. Their shares are available to anyone to buy or sell, regardless of social class, race, education, sex, or other discriminators.
- Public companies have key information available to the public. For example, they must file an annual summary (10K), quarterly summary (10Q), major development notification (8K), proxy statement, and other documents to the US Securities and Exchange Commission (SEC).
- It is easy to get one’s money out of public companies. If you have stock, you sell it. If you have deposited money in a bank, you withdraw it.
- It is hard to get one’s money out of private companies, including private equity and venture capital.
- Banks are vulnerable to runs, in which many depositors try to withdraw their money at the same time. Runs can destroy a bank. Private lenders are not vulnerable to runs.
- Public companies are more heavily regulated than private ones.
- Private companies may be more agile since they have less oversight.
- Private companies often bought divisions of publicly held conglomerates. Now they have become conglomerates. KKR, for example, owns companies in health care, information technology, industrials, real estate, utilities, energy, consumer staples, and materials.
- Private equity and venture capital have paid diminishing returns as a percentage of net asset value, from nearly 20% in 2000 to 2-3% in 2024.[5]
- 87% of US companies with more than $100 million in annual revenue are private. Only 13% are public.[6]
Supporters of private companies and private credit argue that the private system uses money more efficiently. Europe is a case study: they have many banks, but not much private credit. Accordingly, the European system is slow and rigid compared to the US. Detractors of private companies note that a system that excludes millions of people from investment opportunities, is opaque even to its own investors and government, and deals in enormous amounts of debt, is a system that will inevitably collapse.
What does the Bible say?
The Bible teaches readers that societies should acknowledge and promote individual and family control of property (Proverbs 31, Acts 5). Christian scripture insists on hard work (1 Thess 4:11-12, 2 Thess 3:10), encourages investment (Matt 25:15), and supports a capitalist economic system, as opposed to a communist or socialist one. However, God’s word does not support untrammeled winner-take-all capitalism. Greed is forbidden (Matt 6:24, 1 Tim 6:10). A godly society will protect the least fortunate among them, historically including widows and orphans (Proverbs 31:9).
Old Testament Israel had a social system that maximized individual opportunity while providing for income redistribution to avoid extreme wealth concentration. Landowners were not to glean their entire fields but leave grain on the edges to be gleaned by the needy (Leviticus 23:22). Note that the poor had to do the work of gleaning, rather than sitting on their behinds while the landowners fed them cakes. The landowners sacrificed some money, but the poor ate, thus helping provide a stable society.
Every 50 years was a year of jubilee. This year, all debts were forgiven, all slaves were freed, and property was returned to the tribe and family to which God originally gave it. No family in Israel was allowed to perish, and no family was permitted to gain so much as to beggar another family. Each person got a new start, and restoration was never more than 50 years away. Furthermore, the people were to rest, without agricultural, manufacturing, or other activity, which also allowed the land to rest. The jubilee was required in all parts of Israelite society. God commanded it, and the government, supported by a godly people, was to make it happen.
The Bible does not specifically comment on national tax structure or public vs private holding of companies. It does, however, command economic fairness. Jesus sums up the Biblical position well when he discusses the rich man who forever wants more. He concluded, “But God said to him, ‘You fool! This very night your soul is required of you; and now who will own what you have prepared?’”
Improving Fairness in Income and Wealth
Spreading societal resources more fairly requires a whole-of-society effort. A tax system that encourages families as God designed – heterosexual, two-parent (including one biological man and one biological woman), for the bearing and rearing of multiple children – is fundamental. Education must focus on the basics, reading, writing, and arithmetic, rather than social engineering. Moral education should promote honesty, hard work, sacrifice, and the classical virtues. Except for the child himself, parents have ultimate responsibility for and ultimate control of what their children learn.
Generosity, in the form of giving and volunteering, lays the groundwork for a firm society.
We ought to save more, give more, and consume less.[7] Individuals must take responsibility for their thoughts, words, and actions rather than continually shifting the blame to others. America’s addiction to tort claims blocks innovation and bold action. Armies of lawyers, regulators, and bureaucrats shackle innovators. Having abandoned Ultimate Truth, including personal culpability, ours has become a legal system, not a justice system. A genuine belief in God, adherence to the Bible, and unity in the Church will make the difference. As long as we refuse these fundamental fixes, we will diminish.
Most of the changes noted above are social, not political. Governments can and should minimize taxes, especially regressive taxes. The relative transparency and accessibility of public companies make them the first choice for any society, so private companies should be the exception, not the rule. Onerous regulations should be axed. Spending cuts encourage business success. Minimize price controls, which are only occasionally useful in the short term and never in the long term. Ending no-fault divorce will improve marriage and fertility rates, avoid demographic disaster, lower the tax burden, and promote societal stability.
Conclusion
Wealth is not inherently bad. Inequality to a limited degree is also not inherently bad, as some people simply work harder and smarter than others. Man is mortal, and this fact alone ensures that the advantages and disadvantages of wealth and poverty do not accrue forever. God is the ultimate leveler, as everyone on earth will stand before Him in judgment. Misuse of wealth in this life guarantees trouble in the next. Even in this life, the wicked rich will receive what they are due. God is not mocked (Gal 6:7).
But these truths do not absolve us of the responsibility to strive for a just world now. The best shape for a society is fixed in the fundamental realities of the universe. Every successful society since the dawn of time has supported families, demanded labor, and tried to make the distribution of resources fairer within the population. Opportunities for investment should be shared, and the hand of government, while light, should be strong. This article, and many others at the MDHI, describe ways to achieve those goals.
[1] https://taxfoundation.org/data/all/federal/us-tax-revenue-by-tax-type-2024/.
[2] KKR lost money in the transaction. “Going private” is not always in the best interest of investors, managers, or the general public.
[3] https://www.economist.com/special-report/2025/05/23/what-it-means-to-be-illiquid.
[4] https://www.economist.com/special-report/2025/05/23/the-debt-barons-who-are-taking-on-the-banks.
[5] https://www.economist.com/special-report/2025/05/23/what-it-means-to-be-illiquid.
[6] https://www.advisorpedia.com/chart-center/number-of-public-companies-v-private-us/.
[7] https://www.economist.com/finance-and-economics/2025/06/05/trump-thinks-americans-consume-too-much-he-has-a-point.
