Majority Choice of Taxation and Redistribution in a Federation

Stephen Calabrese, Dennis Epple and Richard Romano

No 25099, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide a model with a federal government and multiple local governments, the former with power to levy an income tax for redistribution, and the latter choosing a local income tax, property tax, lump-sum tax or subsidy, and a local public good. Policy is set by majority choice at each tier of government by households that differ by income and ability to move across communities. We provide sufficient conditions for existence of equilibrium and examine its properties. Central findings are federal income distribution, little local redistribution, and local preference for property taxation over income taxation to fund local public goods.

JEL-codes: H2 H7 H71 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-pbe, nep-pol, nep-pub and nep-ure
Note: PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Stephen Calabrese & Dennis Epple & Richard Romano, 2023. "Majority choice of taxation and redistribution in a federation," Journal of Public Economics, vol 217.

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Journal Article: Majority choice of taxation and redistribution in a federation (2023)
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