Wealth Taxation as a Drift Modification: A Fokker–Planck Approach to Tax Neutrality

Battle Count: 80

Primarily a tax policy and wealth distribution paper rather than a trading strategy paper. However, the portfolio neutrality results (Propositions 2 and 4) are directly relevant: they show that proportional wealth taxes do not alter optimal portfolio weights, Sharpe ratios, or excess returns. The Heston model analysis and CRRA separability results connect to quantitative portfolio construction. The distortion channel taxonomy could inform tax-aware trading strategies. The spectral gap and relaxation analysis is relevant for understanding long-horizon portfolio dynamics under tax regimes.

High mathematical sophistication: requires knowledge of stochastic calculus (Itô's lemma, SDEs), Fokker-Planck equations, Langevin dynamics, HJB equations, fiber bundle geometry, and Noether's theorem. The analytical derivations are complete but non-trivial. No computational implementation is provided. Applying the framework to real data would require significant additional work in estimation and calibration.

Fully analytical paper with complete mathematical derivations provided in main text and appendices (A, B, C). No code, no empirical data, no computational experiments. All results are closed-form or derived from standard stochastic calculus. Reproducibility depends on reader's ability to verify the mathematics. No software implementation is provided.