Idle Asset Circulation Tax (IACT): A Dynamic Framework for Regulating Wealth Velocity

The Idle Asset Circulation Tax (IACT) introduces a dynamic taxation mechanism targeting the velocity gap between wealth growth and consumption. Formally expressed as g = rW - vC, where rW = d(log W)/dt denotes the rate of wealth accumulation and vC = C/W the consumption velocity, the IACT activates only when g > g*. This approach reframes taxation as real-time regulation of wealth acceleration, contrasting with static inheritance or wealth taxes. By moderating excessive accumulation without discouraging productive investment, IACT restores balance and circulation, mitigating inequality and reinforcing sustainable capitalism. This work complements the earlier SSRN paper on Controlled Irrationality (DOI: 10.2139/ssrn.5578810).