I did a similar simulation of income&#x2F;wealth distributions using US income tax rates over the past century. It was a gloriously hackish combination of a Lisp tax-rate parser, auto-generated C actor model, and R.<p>I sure hope more economists study these methods because the standard models in Public Economics&#x2F;Taxation are hopelessly inadequate, if not negligent.<p>A Nobel Memorial Prize winning economist by the name of James Mirrlees came up with a theory for optimum income taxation in the 1970s that is still used by governments today. It suggested that a relatively flat tax would be optimal rather than the progressive rates then in vogue. Unfortunately, his model is hopelessly incorrect as it essentially assumes that the general shape of the (pre-tax) income distribution is constant. Its starting point is that if you tax people too much, they will just work less than their untaxed income earning potential, hindering your ability to raise taxes.<p>In reality, progressive tax rates alter the ability of the wealthy to accumulate capital, which alters the Pareto coefficient (power-law constant) of the high-income tail, drastically changing the number of very-wealth individuals and benefiting the bottom 90%. If you tax too regressively, wealth can concentrate and even &quot;condense&quot; in the wealthy -- essentially shifting all earning capacity to a few. This happens because there exist power-law coefficients for high incomes that are not integrable. Beyond a tipping point, wealth will just continue to &quot;condense&quot; in the wealthiest actors.<p>You can find detailed tax schedules and inequality data for the US for the last century. The details of the actor-interactions are not that important, much like molecular interactions do not make a qualitative difference in statistical mechanics. In fact, analytical stochastic models may be easier to calculate, although they are less flexible.<p>Income tax progression can explain a large part of the variation, but not all. There are other important factors such as union participation, war-time expropriation, and lending terms. Nevertheless, the income tax schedule is important and easy to change.