Even a 100% tax on every inheritance would not stop a small group of families from controlling all the wealth.
April 26, 2026
Original Paper
Wealth Distribution from First Principles: An Agent-Based Simulation of Merit, Luck, and Dynastic Survival
SSRN · 6643798
The Takeaway
Extreme wealth inequality is an inevitable result of the difference between compounding assets and liquid wages. In a closed system, wealth naturally condenses into an oligarchic distribution with a Gini coefficient of 0.90. People often assume that breaking up dynastic wealth through taxes would create a level playing field. This simulation shows that the accounting laws of a modern economy will always move money toward the top. The math of the system itself creates an oligarchy regardless of social policy.
From the abstract
<p>Mainstream macroeconomic models frequently rely on top-down equilibrium assumptions to explain the distribution of capital. This paper introduces an operations-based, multi-agent simulation grounded in "Business Physics" to observe wealth distribution from first principles. By treating the economy as a closed system governed by accounting conservation laws, the model bifurcates liquid wages from compounding assets and enforces a strict "Liquidation Trap," where baseline survival friction forc