We study the strategic incentives of regional governments to allocate their budget to public investment and to public consumption expenditures against the background of an incentive-compatible redistribution policy set by the central government. Regional investment changes the productivity...

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...

The introduction of a broad-based indirect tax at the State level is impractical for constitutional reasons. Attention has instead turned to the possibility of alternative new taxes at the State level, such as a State income tax

The federal government and many state governments collect individual income taxes. In this paper, I ask whether the federal government should offer to collect individual income taxes for the states and then distribute the collected taxes. I begin by making advances to the theory of joint...

This paper studies how to design a fiscal constitution that, by capitalizing intergenerational spillovers into land values, is able to protect future generations from expropriation and to generate optimal investment in intergenerational public goods. In particular, we study how to accomplish...