TY  - JOUR
AU  - Calabrese, Stephen
AU  - Epple, Dennis
AU  - Romano, Richard
TI  - Majority Choice of Taxation and Redistribution in a Federation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 25099
PY  - 2018
Y2  - September 2018
DO  - 10.3386/w25099
UR  - http://www.nber.org/papers/w25099
L1  - http://www.nber.org/papers/w25099.pdf
N1  - Author contact info:
Stephen Calabrese
Tepper School of Business
Carnegie Mellon University
Posner Hall, Room 243
Pittsburgh, PA  15213
Tel: 813-974-0656
Fax: 813-974-0832
E-Mail: sc45@qatar.cmu.edu

Dennis N. Epple
Carnegie Mellon University
Tepper School of Business
 Room 4126
Pittsburgh, PA  15213
Tel: 412/268-1536
E-Mail: epple@cmu.edu

Richard Romano
University of Florida 
Department of Economics 
PO Box 117140
Gainesville, FL 32611
E-Mail: romanor@ufl.edu
AB  - 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 of government by households that differ by income and ability to move across communities.  We provide sufficient conditions for existence of equilibrium and examine its properties.  Central findings are federal income distribution, little local redistribution, and local preference for property taxation over income taxation to fund local public goods.
ER  -