Optimization of Tax Switching for Commercial Banks
The article focuses on tax switching for commercial banks in the United States. It presents a mathematical programming model for a portfolio that maximizes expected returns for a given variance of return for commercial banks. It states that the Tax Reform Act of 1969 altered the nature of tax switching by forcing banks to report both gains and losses on transactions in government and corporate bonds as ordinary income rather than as capital gains. It presents major demand factors that contribute to fluctuations in a bank's liquidity. It states that the goal programming model offers significant flexibility to enable decision-makers to handle model simulation with numerous variations of goals and constraints.
||Optimization of Tax Switching for Commercial Banks
Journal of Money, Credit, and Banking (Jan, 1971)
Vol. 3, No. 2
||Lee, Sang M; Lerro, A.; McGinnis, B.