The people at the top don't have much money (as a percentage of their holdings), they have "wealth", where wealth means productive enterprises like e.g. toilet paper factories. The people at the bottom work in toilet paper factories and are given money which they use to buy toilet paper from the people at the top, and thus there is a productive equilibrium between the wiping masses and the owner of the means of wiping.
When the people at the top make less money, they invest less money into new toilet paper R&D and new factories. When the people at the bottom make less money, they spend less on toilet paper, and the people at the top make less money. The balance is fragile, and if your end goal is that your citizens have access to the finest and most luxurious bathroom experience they can, then you must take care to balance the engine of capital with great precision.
> When the people at the top make less money, they invest less money into new toilet paper R&D and new factories.
This (and its inverse, "when the people at the top make more money, they invest it so it does good for the whole economy") is the foundation of trickle-down economics.
It's been empirically proven not to work over the past 40 years.
No, trickle-down economics is the idea that you should reduce taxes on the people at the top because they'll invest more, which only works if the balance is skewed too far towards the people at the bottom, which is clearly wrong right now.
If you had a dial labelled "wealth redistribution percentage", trickle-down economics says you that if you move it towards "0%" everything will get better. What I am saying is that if you start moving it towards "100%", everything will get better, but if you keep moving it for a long time, everything will get worse again. It is not clear to me that this has been empirically proven to be false.
When the people at the top make less money, they invest less money into new toilet paper R&D and new factories. When the people at the bottom make less money, they spend less on toilet paper, and the people at the top make less money. The balance is fragile, and if your end goal is that your citizens have access to the finest and most luxurious bathroom experience they can, then you must take care to balance the engine of capital with great precision.