Rich or poor: Who should pay higher tax rates?

Paulo Murilo Castro de Oliveira

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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.

Date: 2017-11
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Published in Europhysics Letters, 119, 40007 (2017)

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1711.06164

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