Influence of the Corporation Tax Rate on GDP in an Agent-Based Artificial Economic System
An agent-based model of an artificial economic system, including the government, was developed on the basis of the authors’ previous model. This model was used to analyze the factors influencing the relationship between GDP and the corporation tax rate and its mechanism. The findings show that executive compensation and the use of producers’ own cash for investment are both indispensable factors for reproducing the negative correlation between GDP and the corporation tax rate, because these actions help redistribute the firm’s surplus money to the market. Inefficiency in government expenditure is another indispensable condition. The calculated average multipliers for the reduction of both income tax and corporation tax are in good agreement with real data based on the macroeconometric model.
KeywordsAgent-based computational economics Corporation tax Expenditure policy GDP Government Income tax Tax rate
This work was supported by JSPS KAKENHI (Grant Number 23510182, Grant-in-Aid for Scientific Research (C)).
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