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April 26, 20260 citationsOpen Access

Proposing New Rules for Capitalism: Capital Income Synchronization through the Excess Wealth Growth Tax (EWGT)}

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JLJuhyun Lee

Key Points

  • This paper aims to introduce the Excess Wealth Growth Tax (EWGT) to stabilize the capitalist economy by synchronizing capital income with economic growth.
  • Analyzed the wealth-to-GDP ratio and its impact on stability.
  • Simulated 35 years of S&P 500 and U.S. GDP data within the EWGT framework.
  • Proposed extensions to dynamic game theory for future investigations.
  • The EWGT mechanism effectively tethers capital expansion to real economic growth.
  • Dramatic increases in labor compensation were observed post-EWGT implementation.
  • The system exhibited self-correcting stability with calibrated parameters.

Abstract

Historically, the capitalist economy has functioned like a highway without a speed limit. In the modern era, this unrestricted infrastructure affects vehicles of different scales and engine capacities in profoundly divergent ways. Under the current regime, massive capital trucks accelerate at such extreme velocities that they risk destabilizing the economic terrain or crushing smaller participants in their wake. Their momentum has become so decoupled from reality that they threaten to exceed the rotational speed of the Earth'' and drift into a vacuum, far removed from the productive economy. This paper is motivated by the urgent necessity to introduce a fundamental set of traffic rules to the capitalist highway via the Endogenous Wealth-Growth Transfer (EWGT) mechanism. Unlike friction-based redistributive taxation, the EWGT leverages a strategic efficiency arbitrage through an optimal transfer function, D^*. We analytically reduce the system to a single state variable, the wealth-to-GDP ratio ₜ, and prove that the economy endogenously converges to a stable steady state ^* = g/r. Linear stability analysis confirms that the system is self-correcting, with 0 g, Excess Wealth Growth Tax (EWGT), Wealth Inequality JEL Classification: E24, H21, O41, D31, E62

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Cite This Study

Juhyun Lee (2026) studied this question.

synapsesocial.com/papers/69edabb84a46254e215b390dhttps://doi.org/10.5281/zenodo.19734038
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