This paper considers the problem of regional allocation of government funds in a two-region, two-good economy in which production of each good requires labor, capital, and a local public good. Changes in regional allocation of federal expenditures and public services are found to significantly...

The 1986 tax reform represented a major revamping of the United States tax code. It reflected years of ideological and technical debate; and was considered to offer the most efficient tax structure feasible, given the political constraints facing the legislature at that time. However, even before...

TRA86 removed the deductibility of state and local sales taxes from U.S. personal income taxes. This effectively increased the price to state governments of sales tax revenue relative to income tax revenues. This implies that state reliance on income taxes relative to sales taxes should have...

This paper examines the effect of industrial diversification on state unemployment and per capita income. Diversification may provide a form of employment insurance to states during cyclic downturns. Thus well diversified states should experience lower unemployment. To the extent that...