A simple way to view this is to look at each economic quintile's "income multiplier", the lower ones spend their money quickly and often locally. Whereas the we

A simple way to view this is to look at each economic quintile's "income multiplier", the lower ones spend their money quickly and often locally. Whereas the wealthy spend slowly and often within their own class on possessions or much later overseas. Adam Smith and John Stewart Mill both advocated for a steeply progressive income tax and strict controls on Banks and Corporations. The wealthy can wait to spend while many others can't. I learned about this during my Economics Major. Estimating the Marginal Propensity to Consume Using the Distributions of Income, Consumption and Wealth Jonathan Fisher, David Johnson, Timothy Smeeding, and Jeffrey Thompson From https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2019/wp1904.pdf https://www.bostonfed.org/-/media/Documents/Workingpapers/PD... Recent studies of economic inequality almost always separately examine income, consumption, and wealth inequality and, hence, miss the important synergy among the three measures explicit in the life-cycle budget constraint. Using Panel Study of Income Dynamics data from 1999 through 2013, we examine whether these changes are more dramatic at higher or lower levels of wealth and find that the marginal propensity to consume is lower at higher wealth quintiles. This suggests that low-wealth households cannot smooth consumption as much as other households do, which further implies that increasing wealth inequality likely reduces aggregate consumption and limits economic growth.