Regional Cost-of-Living Adjustments in Tax-Transfer Schemes
NBER Working Paper No. 5008 (Also Reprint No. r2154)
The federal income tax and major welfare programs do not take into account significant cost-of-living variations among regions. This article considers what adjustments might be appropriate in light of the distributive purposes of tax and welfare systems and concerns about the efficiency of the interregional allocation of resources. Price index problems, differences in amenities, and heterogeneity of individuals' locational preferences are considered.
Document Object Identifier (DOI): 10.3386/w5008
Published: Tax Law Review, Vol. 51 (1996): 175-198.
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