Pigou, Tiebout, property taxation, and the underprovision of local public goods

https://doi.org/10.1016/0094-1190(86)90048-3Get rights and content

Abstract

Pigou's proposition that the use of distorting taxes rather than neutral head taxes reduces public service levels is examined in this paper. A simple model with a national system of competing local governments is utilized to demonstrate that the use of a distorting property tax on mobile capital decreases the level of residential public services. The case where public services are an intermediate producer good is also considered.

References (28)

  • R. Boadway

    On the method of taxation and the provision of local public goods: Comment

    Amer. Econom. Rev.

    (1982)
  • M.J. Boskin

    Local government tax and product competition and the optimal provision of public goods

    J. Pol. Econom.

    (1973)
  • W.C. Brainard et al.

    The possibility of oversupply of local public goods

    J. Pol. Econom.

    (1967)
  • J.M. Buchanan et al.

    Efficiency limits of fiscal mobility: An assessment of the Tiebout model

    J. Publ. Econom.

    (1972)

    • Cited by (0)

    ∗

    Research support from the National Science Foundation (Grant SES82-09210) is gratefully acknowledged. We would like to thank John D. Wilson for helpful comments on an earlier draft.

    View full text
    Copyright © 1986 Published by Elsevier Inc.