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Rich or poor: Who should pay higher tax rates?

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  • Paulo Murilo Castro de Oliveira

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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  • Paulo Murilo Castro de Oliveira, 2017. "Rich or poor: Who should pay higher tax rates?," Papers 1711.06164, arXiv.org.
    • Handle: RePEc:arx:papers:1711.06164
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    References listed on IDEAS

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    1. Thomas Piketty, 2013. "Le capital au XXIe siècle," Post-Print halshs-00979232, HAL.
    2. Chakrabarti,Bikas K. & Chakraborti,Anirban & Chakravarty,Satya R. & Chatterjee,Arnab, 2013. "Econophysics of Income and Wealth Distributions," Cambridge Books, Cambridge University Press, number 9781107013445.
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