Discusses some of the possible effects on state and local governments of the elimination of sales tax deductibility and of some of the other important tax policy changes that have occurred in the recent tax reform.

Acting in the interest of their residents, U.S. states have incentives to impose taxes on the profits of corporations owned by nonresidents, within limits imposed by federal statutes and by the Constitution. This paper presents a model within which a state — using an apportionment formula that...

Medicaid spending has become a major element in state budgets and support from federal Medicaid grants is now a main source of state government funding. We discuss recent, ongoing, and prospective reforms of intergovernmental finances and regulations, including the 1996 welfare reform, the...

Mature federations have relatively transparent delineations of authority among levels of government; subnational governments enjoy considerable autonomy in their expenditure, revenue, and debt policies. In other countries, problems of soft budget constraints, bailouts, and fiscal and financial...

This paper examines the implications of federal statutory restrictions on state government taxing powers. Such pre–emption can prevent states from pursuing policies that are best adapted to their economic circumstances and objectives, inefficiently constraining decentralized state tax...