Rich or poor: Who should pay higher tax rates?

A dynamic agent model is introduced with an annual random wealth multiplicative process followed by taxes paid according to a linear wealth-dependent tax rate. If poor agents pay higher tax rates than rich agents, eventually all wealth becomes concentrated in the hands of a single agent. By contrast...

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Veröffentlicht in:Europhysics letters 2017-08, Vol.119 (4), p.40007
1. Verfasser: de Oliveira, Paulo Murilo Castro
Format: Artikel
Sprache:eng
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Zusammenfassung:A dynamic agent model is introduced with an annual random wealth multiplicative process followed by taxes paid according to a linear wealth-dependent tax rate. If poor agents pay higher tax rates than rich agents, eventually all wealth becomes concentrated in the hands of a single agent. By contrast, if poor agents are subject to lower tax rates, the economic collective process continues forever.
ISSN:0295-5075
1286-4854
DOI:10.1209/0295-5075/119/40007