find that, despite the horizontal externalities, the use of redistributive taxation can be decentralized to the states: the …

welfare precludes income equality in this setting. We show that their case breaks down when the public good is impure: there … exist individual preferences under which maximization of social welfare necessitates exact income equalization. Even if the … public good is pure, any given, positive level of income inequality can be shown to be socially excessive by suitably …