Imagine that a distant relative died and left you $1 million. What would you do with it? Most of us would begin by paying off our bills, but then what? Buy that dream car that you always wanted? Quit your job and live on the investment proceeds?

Now imagine that the inheritance was $10 million. What would you do after you spent the first million? A huge mansion, a fancy yacht — but would you really want these things? If you have school-age kids, you might use some of it to buy them new cars or send them to top-of-the-line colleges, but then what?

Most of us would probably say that we would give some of it away and invest the rest, but that would only compound the problem.

Say you spent $2 million and earned a 5% return on the remaining $8 million. That would bring you a lifetime income of $400,000 per year after you had already addressed all of your actual needs and wants. Could you spend that much money? You could always give what you didn’t need to worthy causes, but every dollar that you didn’t spend or give away would be added to the $8 million that you originally invested, giving you even more income in future years.

Now imagine inheriting $100 million. For most of us, our imaginations fail us at this point. If you invested the money at 5% interest, you would earn $5 million per year for the rest of your life. What could you possibly do with that much money? You might become a major patron of a charity that’s close to your heart, or donate large amounts to elect political candidates who share your values or give enough to your alma mater to have a building named after you. But any income that you did not spend or give away would further increase your fortune.

Now multiply that figure by 10 and you reach $1 billion. Can you even imagine that much money? By this point it’s just numbers on a page, more money than anyone could possibly use. Invested at 5%, your fortune would grow by $50 million per year until it reached $2 billion, then $3 billion…

Someone might object that these scenarios ignore estate or income taxes, but the whole point of the illustration is to give us a realistic basis for assessing the potential consequences of taxing the wealthy.

As several Democratic presidential candidates have noted, over 90% of the financial gains from the last 10 years of economic expansion have gone to people at the top of the income and asset pyramid. But the imbalance actually began over 40 years ago. After adjusting for inflation, the incomes of the bottom 90% of workers have increased only 15% since 1979, while those of the top 1% have increased 138%.

The gap is even wider at the extremes: low-wage workers actually lost 5% of their annual earnings during this period, while the top 0.001% saw their incomes grow by 635%, from $16.6 million per year to $121.9 million.

This growing gap in income levels has led to a similar gap in assets. Currently, 1% of Americans own 37% of the country’s total wealth (homes, cars, businesses, stocks and bonds, personal possessions, etc.), while the top 20% owns 80%. The other 80% of Americans own only 12% of the nation’s assets.

The 400 wealthiest Americans now own more than the entire bottom half of the population. The gap in assets between those on the top and those on the bottom is now greater in the United States than in any other Western nation except for Switzerland and Denmark.

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None of this is by accident; it occurred as a direct result of tax policies approved by Congress in response to intensive lobbying by the wealthiest Americans and their attorneys. The 2020 Democratic presidential candidates have proposed a variety of policy changes that would reverse this trend.

One solution promoted by all of the candidates involves increasing federal income tax rates for the wealthy to pay for programs that would improve the lives and opportunities of the middle class and the poor, including better health care, affordable child care for working parents, and free college tuition. Most have also proposed increasing the tax rate on investment income to the same level as employment income so that a person working on an assembly line will no longer pay a higher tax rate than the owner of the company.

As we saw in our illustration, however, these solutions fail to address the essential problem with our current system: the rich will continue to grow richer from the earnings on their investments unless tax rates approach the 90% level that prevailed under Republican President Dwight Eisenhower.

That is why Elizabeth Warren and Bernie Sanders have called for a “wealth tax” on people with very large fortunes. The tax rate would be modest — for Warren, 2% on assets between $50 million and $1 billion and 3% on assets above $1 billion. Sanders’ proposal would begin at a lower level ($32 million) and apply a higher rate on the largest fortunes (up to 8%). Both would raise trillions of dollars for new programs while still leaving the wealthy with many billions in the bank.

Conservatives react in horror to such proposals. They insist that people need incentives of earning huge incomes and accumulating vast wealth to motivate them to invest in building companies that will create jobs for everyone. But the rich eventually reach a point where having more income or wealth makes no real difference in their own lives or those of their descendants, yet they continue working, building and investing.

Why? Because humans are motivated by more than money. The more we earn, the more other factors come into play: the desire to achieve a goal, to convert a vision into a reality, to build something that will last, to make the world a better place or simply to maximize one’s God-given potential. Such motivations are not affected by whether taxes leave a person with a few billion dollars less in assets.

In short, conservatives are wrong — increasing taxes on the super-rich is unlikely to affect their contribution to economic growth, while it would most definitely improve the lives and opportunities of people in the middle class and below.

Sanders took some heat a few weeks ago when he stated that “billionaires don’t have a right to exist” in America. Perhaps he could have stated it more politely, but his basic insight is sound: nobody needs a billion dollars to live in America. Billionaires exist only because we the voters allow it.

When will ordinary working Americans stand up together and say, “No more”?

(Chris Stanley is a professor at St. Bonaventure University.)

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