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Rich or poor: Who should pay higher tax rates?

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 Publication date 2017
  fields Financial Physics
and research's language is English




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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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