A Study of the Optimal Asset Allocation as Raising Taxes on the Rich

Kuo-Shing Chen, Chien-Chiang Lee () and David So- De Shyu

Advances in Management and Applied Economics, 2015, vol. 5, issue 3, 1

Abstract: We study the effects of introducing taxation in classical continuous-time optimization problems with utility from consumption and optimal asset allocation as taxation on the rich. This paper employs the framework of original Merton's model to a new optimal portfolio selection that consists of a riskless asset as well as a risk asset. The aim of this article is to analyze the portfolio strategies that are adopted a dynamic model of consumption, as the impact on optimal portfolio rules concerns the contribution-hedge strategy. We thus emphasize that the current practice of taxing the rich only is appropriate when trying to reduce the distortions of the taxation system on the portfolio behavior of the investor, and that taxation applied on contributions would be more adapted.

Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.scienpress.com/Upload/AMAE%2fVol%205_3_1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spt:admaec:v:5:y:2015:i:3:f:5_3_1

Access Statistics for this article

More articles in Advances in Management and Applied Economics from SCIENPRESS Ltd
Bibliographic data for series maintained by Eleftherios Spyromitros-Xioufis ().