The effects of taxes on wealth inequality in Artificial Chemistry models of economic activity

Banzhaf, Wolfgang

doi:10.1371/journal.pone.0255719

Cited by 3 publications

(2 citation statements)

References 41 publications

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“…The fundamental model involves the random exchange of money between two agents selected randomly. Since the initial introduction of the kinetic exchange model, researchers have developed modified versions that incorporate features such as debts, taxation, and saving propensity [ 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 ]. Now, let us delve into the topic of kinetic exchange models for money or wealth.…”

Section: Models Of Income and Wealth Distributionmentioning

confidence: 99%

“…However, in the model where agents save a portion of their money and exchange the rest, the tail of the money distribution function follows a power-law distribution. The introduction of wealth distribution and the kinetic exchange model of money has sparked significant attention in the field of econophysics [ 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 ]. In this review, we aim to provide an overview of the current developments in kinetic exchange models and the distribution of income and wealth.…”

Section: Introductionmentioning

confidence: 99%

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Emergence of Inequality in Income and Wealth Dynamics

Cho

Park

Mafwele

et al. 2023

Entropy

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Increasing wealth inequality is a significant global issue that demands attention. While the distribution of wealth varies across countries based on their economic stages, there is a universal trend observed in the distribution function. Typically, regions with lower wealth values exhibit an exponential distribution, while regions with higher wealth values demonstrate a power-law distribution. In this review, we introduce measures that effectively capture wealth inequality and examine wealth distribution functions within the wealth exchange model. Drawing inspiration from the field of econophysics, wealth exchange resulting from economic activities is likened to a kinetic model, where molecules collide and exchange energy. Within this framework, two agents exchange a specific amount of wealth. As we delve into the analysis, we investigate the impact of various factors such as tax collection, debt allowance, and savings on the wealth distribution function when wealth is exchanged. These factors play a crucial role in shaping the dynamics of wealth distribution.

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Section: Models Of Income and Wealth Distributionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Emergence of Inequality in Income and Wealth Dynamics

Cho

Park

Mafwele

et al. 2023

Entropy

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Victory Tax: A Holistic Income Tax System

Jacobs

2021

Entropy

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How can an income tax system be designed to exploit human nature and a free market to create a poverty free society, while balancing budgets without disproportional tax burdens? Such a tax system, with universal character, is deduced from the following guiding principles: (1) a single tax rate applies to all income types and levels; (2) the tax rate adjusts to satisfy budget projections; (3) government transfer only supplements the income of households with self-generated income below the poverty line; (4) deductions for basic living expenses, itemized investments and capital losses are allowed; (5) deductions cannot be applied to government transfer. A general framework emerges with three parameters that determine a minimum allowed tax deduction, a maximum allowed itemized deduction, and a maximum deduction defined by income percentage. An income distribution that mimics the United States, and a series of log-normal distributions are considered to quantitatively compare detailed characteristics of this tax system to progressive and flat tax systems. To minimize government dependency while maximizing after-tax income, the effective tax rate (ETR) as a function of income percentile takes the shape of the letter, V, inspiring the name victory tax, where the middle class has the lowest ETR.

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Analyzing Billionaire Databases Using Python

Rama

2023

Advances in Systems Analysis, Software Engineering, and High Performance Computing

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The network of billionaires could be analyzed through their data and information. Python has the capability of taking data and information from many sources and analyzing them from a single database. The idea of the report is to compare databases with all the billionaires in the world at different time frames. By collecting all the needed, such as personal information and integrable data, the program will output them in a table. The program takes datasets in the Comma Separated Values file and gives out the output through the Google Colab platform. The authors give importance to net worth and other publicly sensitive information that will be analyzed by the Python program. The purpose of analyzing billionaires around the world is to find similarities among countries with the potential for greater economic development.

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The effects of taxes on wealth inequality in Artificial Chemistry models of economic activity

Cited by 3 publications

References 41 publications

Emergence of Inequality in Income and Wealth Dynamics

Emergence of Inequality in Income and Wealth Dynamics

Victory Tax: A Holistic Income Tax System

Analyzing Billionaire Databases Using Python

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