Lets just accept the figures above are correct.
Rather than a one off distribution let's assume that we want to enhance the income of folk for the indefinite future. To do otherwise would risk a growth bubble to meet immediate desires, followed by no lasting benefit.
Assume a reasonable rate of return of 5% pa on the capital - £662pa - nice to have but not lifechanging. A pleasant holiday, buy a few clothes, meal out for 2 once a month. A bit like the winter fuel allowance - for some important, for many (most) pensioners no great deal.
Investment needs a concentration of capital. Government do this - occasionally effectively, often not, through taxation. Private sector investment in business, jobs, enterprise would be curtailed as:
- the funds they would have otherwise have access to would have been confiscated,
- incentives for investment and risk are removed if profits are subject to further confiscation
A slight overstatement, I accept, but assuming higher tax rates, possibly amounting to confiscation would somehow transform economic prospects to the benefit of all in society is truly naïve.