Rich or poor: Who should pay higher tax rates?
classification
💱 q-fin.GN
physics.soc-ph
keywords
agentspoorratesagenthigherprocessrichwealth
read the original abstract
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.
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