The obvious problem is that if wealthy people get more money, they literally can't spend it all, so the just invest it instinctively/based on reflex. But here is the problem, what if they don't invest their money? What if they keep 10% of it liquid? Spending money or investing it puts money in the hands of the rest of the economy. Not spending or not investing it means there is no income opportunity for anyone else, that money is essentially dead to the economy and dead money has to be replaced. This means people need to borrow money at the rate money dies, they need to go in debt to replenish all the dead money.

Here is a problem, at some point the debt load on the economy is so high, people refuse to take on more debt, but the system demands yet more debt. What happens? Since money is leaving the real economy and just doing nothing, deflation will occur, which will increase real returns above zero, even if the interest rate is already zero. We would expect that if people save more money and nobody borrows more money, that the return on money goes down but with deflation the opposite happens! Real returns start going up, which makes all economic activity in the pyhsical economy unprofitable. Imagine if you set a land value tax that is higher than anyone wants to pay, everyone would abandon the land and in the same way a too high return expectation makes people flee the physical economy into the financial economy.

In other words, the completely obvious and reasonable option of paying off your debt doesn't even exist, it simply is not a legal move in this board game we call the financial economy.

The completely obvious answer to this problem is to let yields become negative to counteract deflation, the end result is that the real return is zero, people get to pay off their debt, people who refuse to spend or invest get disincentivized from holding onto dead money and instead make it available to those who need it.

Here is another perspective: In functioning markets we expect that resources are allocated to those who have too few of them, like food being sold to starving people because they are willing to pay higher prices which solves food shortages as it becomes more profitable to become a farmer and produce food.

We should ask ourselves then, if farming works as intended (with some caveats) then why on earth does money not follow the same principle? Why doesn't the economy try to allocate money to those who need money the most? It is rational and efficient to do so, yet in our current economies we come up with tons of post rationalizations to defend the status quo. What we see instead is that money is allocated towards those who need it least, money compounds and allocates more money to those who already have too much. This is clearly inefficient, it means less total economic growth, it means lower wages for everyone, it means centralisation of the economy and increasing dysfunction as a result of valuing a handful of preferences more than everyone else's.

A negative interest rate on cash deallocates money away from those who don't need it and makes it available for those who need it. The wealthy can keep their wealth, they just have to keep it in the real world and not in some abstract "stores of values" that upon further inspection don't change in any shape or form even as their "value" changes. Spending more money on the same shiny rock doesn't make you wealthier, it just gives you the illusion of wealth. Imagine owning a kilogram of gold and doubling the population and thereby doubling the amount of gold buyers and thereby the price of gold, the real wealth doesn't exist inside the gold, it exists in the form of the doubling population, the owner of the gold did nothing to double the population so it doesn't make sense to give him twice the share in the economy just because the population doubled, that would mean someone else would have to give up their share in the economy.