Leland, Hayne E. - Institute of Business and Economic Research (IBER), … - 1999
proportional, but may differ with buying and selling, and may include a (positive) capital gains tax component. We show that the … capital gains tax is to allow proportions to substantially exceed their target levels before selling. When an asset …'s proportion exceeds a critical level, selling should occur to bring it back to that critical level. Capital gains taxes lead to …