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Voting, flat tax and basic income: Effects on equality

Tappe Maestro, Rafael, Mr (2020) Voting, flat tax and basic income: Effects on equality. Bachelor's Thesis, Artificial Intelligence.

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Abstract

I extend an economic model to compare two government agents with regard to income and money distribution in a multi-agent system (MAS) of firms and households. Each month of the simulation households are taxed and receive a universal basic income (UBI) by a government agent. The government agents implement two different processes of determining a flat tax and UBI. Both processes are dependent on voting by the population of households. The first agent is modelled after the voting process of a representative democracy while the second agent models a direct democracy. Between firms and households two types of relationships exist. Firstly, firms produce items which are sold to households. Secondly, firms employ households to produce items. Each month, item prices and wages are updated based on supply and demand. The model is used to test which government achieves the highest income equality between households, as determined by the Gini index. It is also evaluated whether flat tax and UBI are effective measures of redistribution, as measured by the Gini index. While overall both governance types produce similar economic metrics the direct government tends towards less redistribution. Under the flat tax and UBI proposal a small effect size on money distribution among households was observed.

Item Type: Thesis (Bachelor's Thesis)
Supervisor name: Grossi, D.
Degree programme: Artificial Intelligence
Thesis type: Bachelor's Thesis
Language: English
Date Deposited: 15 Sep 2020 09:19
Last Modified: 15 Sep 2020 09:19
URI: http://fse.studenttheses.ub.rug.nl/id/eprint/23398

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