Taxation Under Tiebout
The economist Charles Tiebout is famous for analogizing local government to perfectly competitive firms. His model inspired this question on my last public finance midterm:
If the Tiebout model
were correct, how would you expect local governments to raise revenue? Carefully explain your answer.
Who wants to take a stab at this? I’ll post my preferred answer as a followup.
The post appeared first on Econlib.