Comparing the Impact of Basic Income and Negative Consumption Tax on Economic Inequality using Multi-agent Simulation

Abstract

Using a multi-agent simulation, this paper compared prediction of the economic impact of a basic income (BI) and a negative consumption tax. Simulation models with modifiable inheritance, income, and consumption taxes were employed to analyze the results of the prediction. The parameters of each tax system were simulated under a variety of scenarios. The results showed that consumption taxes were likely to have a pronounced impact on the saving gap. The results also suggested that income taxes were likely to have a direct impact on the aptitude rate. Furthermore, it was cleared that excessive provision of BI leads to disparities in household savings.