I'll give an example/analogy. Jenny is a waitress in a cocktail bar, earning very modest wages. She shares an apartment with her roommate, and does her best to contribute to her Roth IRA. One day, Jenny's rich uncle Rufus dies, and leaves to her $10M. Jenny puts the $10M into the Vanguard S&P 500 index fund. The calendar rolls over, and now it's tax-season in the following year. Vanguard sends to Jenny a 1099R, showing that hey, over the months that she's had that account, it has generated $100K in taxable dividends. Now she needs to scramble to pay her tax bill... take extra hours at the bar, maybe get a second job... except that those extra hours or job, also mean more income tax. By becoming richer, Jenny has become... poorer.
The peanut gallery might yell, "Hey Jenny, you dumb [expletive]! Don't ya know, ya gotta pay taxes on that them thar gains?" Yeah, Jenny knows. Now she makes quarterly estimated payments to the IRS (next one is due tomorrow, BTW)... meaning, that even less of her paycheck is hers to keep.
OK. The solution is right under Jenny's nose, yes? She can withdraw some of that money from her account, using it to pay her taxes, yes? She can. But she wants to keep contributing to her retirement... or at very least, not withdrawing from her accounts. Now suddenly she has to! She never earned much, but she spent a lifetime trying to be frugal and diligent and set money aside. Now, she can't.
I'm not Jenny. I don't work in a cocktail bar. I don't have a rich uncle Rufus. No stupendous windfalls here... just gradual accumulation. But eventually one wakes up, and realizes: "Holy [expletive!]! I have become just like Jenny!"