A magic number versus trickle down agent-based model of tax policy

The purpose of this article is to explore the interaction of two opposing forces. The forces of wealth accumulation in sturring job creation and the force of satisfaction and the “magic number” in causing job destruction are explored." An agent based model is proposed to explore the potentially competing effects of two hypothesized economic forces. The first is “trickle down” economics in which job creation occurs when wealth accumulates. The second is the “magic number” effect in which retirement occurs when wealth accumulates. Also, considered is the so-called “substitution effect” in which less is produced when the tax burden is considered to be too high. The “magic number” agent-based model proposed here is then explored using design of experiments. Three types of experiments were performed to explore (but not validate) the effects of assumed conditions on system gross domestic product (GDP) and tax revenue predicted after 50 years of operations.