Dramatic declines in capital tax rates among U.S. states and European countries have been linked by many commentators to tax competition, an inevitable “race to the bottom,” and underprovision of local public goods. This paper analyzes the reaction of capital tax policy in a given U.S. state...

Dramatic declines in capital tax rates among U.S. states and European countries have been linked by many commentators to tax competition, an inevitable “race to the bottom,” and underprovision of local public goods. This paper analyzes the reaction of capital tax policy in a given U.S. state...

The effects that corruption and tax policy have on entrepreneurship and firm growth have been often studied in the literature. This current paper adds to that literature by evaluating how the interaction effect between corruption and tax policy influences firm entry at the US state level, using...

This paper discusses the current state of fiscal relations between the federal, state and local governments in the United States and suggests directions for improvement. The significant degree of fiscal autonomy of the states and, to a lesser extent, of local governments has had several...

We study U.S. state tax rules over the past 70 years to shed light on the determinants of U.S. state tax policy, generating three key results. First, we show that long-term tax trends are not consistent with Tiebout sorting and race-to-the-bottom competition models. Second, we document evidence...

This article presents a new approach to federalism that focus more on the outcome desired than on formal power relationships, considers more realistically the role played by states and localities, and incorporates the role of citizens more directly in the analysis. This approach underlines,...

Over the past two decades, litigation has exploded over state corporate tax shelters. In the typical transaction, taxpayers devise corporate structures so as to shift income (most commonly income from intangible assets) to low or no tax jurisdictions. Much of the literature on these transactions...

This paper develops new measures of environmental costs and local revenue capacity as the basis for a new municipal aid formula in Massachusetts. On the cost side, unlike previous studies, we quantify the effects on local non-school spending of characteristics related to uncontrollable costs. On...

Our purpose is three-fold. First, we summarize some of the core insights from both classic and more recent papers in the literature on the role of intergovernmental grants in systems of fiscal federalism. Second, we provide an updated look at some of the key institutions through which...

Unlike most of the world’s federations – including Australia, Canada, Germany, India, South Africa and numerous others – the United States has no system of federal equalization grants in place to reduce fiscal disparities among its subnational governments. Only at the state level, through...