Wealth Taxation as a Drift Modification: A Fokker-Planck Approach to Tax Neutrality
Fuente:
arXiv
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| Natura: | Preprint |
| Pubblicazione: |
2026
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| _version_ | 1866911596470599680 |
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| author | Frøseth, Anders G |
| author_facet | Frøseth, Anders G |
| contents | We reformulate the neutral wealth tax framework of Froeseth (2026; arXiv:2603.05264) in the language of stochastic dynamics and statistical physics. Individual wealth under geometric Brownian motion satisfies a Langevin equation with multiplicative noise; the probability density of wealth across a population then evolves according to a Fokker-Planck equation. A proportional wealth tax at market value enters as a uniform reduction of the drift coefficient, preserving the diffusion structure and all relative probability currents. This drift-shift symmetry is the physical content of tax neutrality. Each channel through which neutrality breaks down in practice - book-value assessment, liquidity frictions, forced dividend extraction, migration, and market impact - corresponds to a specific violation of this symmetry: a state-dependent, asset-dependent, or flow-dependent modification of the Fokker-Planck equation. The framework clarifies when wealth taxation is a benign rescaling of the dynamics and when it introduces genuinely new physics. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2603_05283 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Wealth Taxation as a Drift Modification: A Fokker-Planck Approach to Tax Neutrality Frøseth, Anders G Physics and Society Statistical Mechanics Portfolio Management We reformulate the neutral wealth tax framework of Froeseth (2026; arXiv:2603.05264) in the language of stochastic dynamics and statistical physics. Individual wealth under geometric Brownian motion satisfies a Langevin equation with multiplicative noise; the probability density of wealth across a population then evolves according to a Fokker-Planck equation. A proportional wealth tax at market value enters as a uniform reduction of the drift coefficient, preserving the diffusion structure and all relative probability currents. This drift-shift symmetry is the physical content of tax neutrality. Each channel through which neutrality breaks down in practice - book-value assessment, liquidity frictions, forced dividend extraction, migration, and market impact - corresponds to a specific violation of this symmetry: a state-dependent, asset-dependent, or flow-dependent modification of the Fokker-Planck equation. The framework clarifies when wealth taxation is a benign rescaling of the dynamics and when it introduces genuinely new physics. |
| title | Wealth Taxation as a Drift Modification: A Fokker-Planck Approach to Tax Neutrality |
| topic | Physics and Society Statistical Mechanics Portfolio Management |
| url | https://arxiv.org/abs/2603.05283 |