Entrepreneurial activity is presumed to generate important spillovers, potentially justifying tax subsidies. How does the tax law affect individual incentives? How much of an impact has it had in practice? We first show theoretically that taxes can affect the incentives to be an entrepreneur due...

Though the traditional literature in fiscal federalism argues that the Federal government should have primary responsibility for income redistribution, U.S. states are in fact actively engaged in redistribution. This paper develops a positive model of the respective roles of state and Federal...