I don't think it's quite right as an
analogy. There's a city/suburb problem
that you can appreciate wherein better-off
people reside in suburbs and use the cities
for job locations, services, and certain
amenities not available in suburbs (museums,
sports teams, etc.). This way they avoid,
with the connivance of state legislatures,
sharing their local taxes with the less
fortunate. The urban rich can afford to
opt out of city services, so they don't
care if the urban tax base goes to shit.
Within cities, the use of enterprise zones,
business improvement districts, and tax
increment financing further balkanizes
and shrinks the tax base.
Tax competition is usually understood,
and I would say properly understood,
as units of more or less similar nature
(states, localities, nations) competing
against each other for taxpayers by reducing
their taxes.
mbs
The Wall Street Journal today has a front page story on how this tax
competition as gutted the tax base of Toledo, gutting its educational
system.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
