دانلود رایگان مقاله انگلیسی محدودیت های طبیعی نابرابری ثروت و اثربخشی سیاست مالیاتی - Sage 2017

Abstract

This article examines Thomas Piketty’s thesis that there are no natural limits on the accumulation of wealth. We undertake our examination in the context of a simple general equilibrium model with infinitely lived dynasties. We show that extreme wealth accumulation does not happen in general equilibrium unless capital and labor are substitutes, an assumption which also leads to unbalanced growth. We also show that even with unbalanced growth, differences in rates of return and effective labor are not sufficient to cause unbounded inequality. Only permanent savings rate differences can lead to extreme wealth concentration. Finally, we show that while a flat wealth tax will not eliminate extreme wealth concentration, both a graduated wealth tax and a flat income tax will.

Conclusion

In this article, we have investigated the situations under which unbounded wealth concentration is possible. We have done so by building and simulating a simple general equilibrium model of long-run wealth accumulation through intergenerational bequests.

We find that two necessary conditions must be met for unbounded wealth concentration. First, capital and labor must be substitutes in production, and technical progress must not be labor augmenting. In this case, the importance of capital income rises over time and labor income becomes irrelevant in the limit. Second, the rich must save more than the rest of society. In our simple model, unbounded concentration will not occur if either of these conditions is absent.

We also show that other intuitive channels for wealth concentration are not sufficient. For example, differing rates of return on capital investment are insufficient even when there is unbalanced growth in favor of capital. The same is true for differing earnings abilities. Finally, we show that while a flat wealth tax will not eliminate extreme wealth concentration, both a graduated wealth tax and a flat income tax will.