Effects of taxes, redistribution actions and fiscal evasion on wealth inequality: an agent-based model approach

TL;DR

This paper uses an agent-based model to analyze how taxes, redistribution, and tax evasion influence wealth inequality, highlighting the importance of policy design for fostering more equitable societies.

Contribution

It extends a previous agent-based model to include non-uniform redistribution and tax evasion, providing insights into policy impacts on wealth distribution.

Findings

Well-designed redistribution policies reduce inequality.

Strict control of tax evasion promotes egalitarian wealth distribution.

Policies are crucial for sustainable economic equality.

Abstract

In capitalist societies, only a single right can be fully exerted without constraints of any kind: the limitless accumulation of wealth. Such imperative or prime axiom is the ultimate cause of the raising waves of inequalities observed today. In this work we extended the agent-based model proposed by Castro de Oliveira arXiv:1711.06164 to study the effects of non-uniform income redistribution policies and tax evasion on the final steady-state wealth distribution of economic agents. Our simulational results strongly support that well designed policies of income redistribution and rigid control of tax planning possibilities are unavoidable instruments to promote the raise of more economically egalitarian and sustainable societies.