#### How can we reduce wealth inequality?

We next consider some generalizations of the model to see what can be done to reduce the excessive wealth inequality that occurs. One possible way of avoiding wealth accumulation is to not allow agents to lose a percentage of their wealth on most economic exchanges.

**Simulation: Agent Wealth with Taxes**

This simulation illustrates the effects of taxation and revenue distribution works in the same way as before, but now you have a choice between sales, income and wealth taxes, and between the two types of tax revenue distribution. Each agent begins with one unit of wealth, which we again assume to be $100,000. Try each of the different types of taxes with each type of tax revenue distribution.

#### Gini Coefficient: A measure of inequality

By looking at the distribution of wealth among the agents we were able to conclude that various forms of taxation and distribution can lead to greater or lesser wealth equality. However, it is useful to introduce an explicit measure of wealth inequality so that we can reach more quantitative conclusions.

**Simulation: Gini Coefficient**

This simulation illustrates the effects of taxation and revenue distribution works in the same way as before, but now you have a choice between sales, income and wealth taxes, and between the two types of tax revenue distribution. Each agent begins with one unit of wealth, which we again assume to be $100,000. Try each of the different types of taxes with each type of tax revenue distribution.

#### Discussion of the Gini results

The results of simulations using the models we have discussed show that the Gini coefficient is less than 0.9 for all taxation methods and the proportional distribution of tax revenue.

**Simulation: Economic Mobility**

This simulation explores how likely is it that an agent will migrate from the bottom quartile to the top quartile in an economy with and without taxes and wealth distribution. Most Americans believe that if we are born to a poor family, we have a reasonable chance of reaching the middle class or better if we obtain a good education and work hard. The ability to change our economic status is known as economic mobility.