Optimal Consumption And Portfolio Research In The Presence Of Tax

The individual tax is an important part of finance income, and it adjusts individual income. It plays an important role in the tax system of our country. As the actuality of our country, the tax system in our country needs to be reformed. Analysis the impact of tax rate changes on agent's consumption-portfolio policy is and important basis for tax policy reformation.The aging of population is the hardest challenge for China's social security fund. Unemployment and endowment insurance impact the development of China's economic. The retirement age have effect on the agent's optimal consumption and portfolio choices, there by have effect on the economics. The society's consumption structure, labor supply and social security will face changes and challenges.This essay analysis the optimal consumption and portfolio polices with habit formation and individual income tax, the model is based on the BMS model. At the same time, we show the optimal retirement region when the retirement date can be choose freely. Assuming the agent's consumption must exceed the habit formation, under the restriction of no bankruptcy, get the conclusion that the optimal policy is influenced by the agent's history consumption, real disposable income and state price density ( ). In this essay, we assumed that the agent can borrow from his future labor income, using the future labor income to consume. But the wealth in the life cycle must satisfy the condition that no bankruptcy. SPDDue to the particularity of the model built in the essay, it is not practical to measure the parameters accurately. Therefore in the empirical research predigested the time series parameters, fixed them to the given value. As the empirical research is focused on the qualitative analysis of the tax rate's influence on the optimal policy, therefore, the result will not be influenced by the predigestion of other paramteters.Compared with BMS model, this essay considered the tax rate and using the Matlab to validate the model, analysis the influence of changing tax rate。...