Another problem with the Tiebout model is that in most states, corporate income taxes are levied in proportion to the share of a company's revenue that's earned in the state. So moving offices out of a high-tax state won't cut a company's tax liability.
I think it's because it implies that taxes are the same as paying yourself for a good while we know that taxes are not 100% local? In that case public school would be like paying for private school, while in reality we know that it always "feels" subsidized by someone else.
Second I think it is because when you join a neighborhood you join a club, with many amenities not only a school, you can't select for certain amenities and take away public schools, you have like 120 clubs you can join in a city and they are mostly separable in 2 or 3 types of clubs.
IANAE! My first reaction was, what planet does this guy live on where people can move that easily? Your economist objections seem perfectly cromulent too, but again, IANAE :-)
I agree! Wrote this 30 years ago, when I was 17.... Won me an internship at the Minneapolis Fed! https://www.minneapolisfed.org/about-us/community-development-and-engagement/student-essay-contest/essay-contest-results/1996-1997-essay-contest-first-place-essay
Another problem with the Tiebout model is that in most states, corporate income taxes are levied in proportion to the share of a company's revenue that's earned in the state. So moving offices out of a high-tax state won't cut a company's tax liability.
I think it's because it implies that taxes are the same as paying yourself for a good while we know that taxes are not 100% local? In that case public school would be like paying for private school, while in reality we know that it always "feels" subsidized by someone else.
Second I think it is because when you join a neighborhood you join a club, with many amenities not only a school, you can't select for certain amenities and take away public schools, you have like 120 clubs you can join in a city and they are mostly separable in 2 or 3 types of clubs.
Ok, so we see in practice that municipalities aren't like total free market competitors with each other ... but hwhy not?
Maybe we can promote competition through performance appraisal?
IANAE! My first reaction was, what planet does this guy live on where people can move that easily? Your economist objections seem perfectly cromulent too, but again, IANAE :-)