Interstate Fiscal Disparities in America

Heterogeneous Vertical Tax Externalities, Capital Mobility, and the Fiscal Advantage of Natural Resources

“…Also related is the literature on …scal equalization and disparities, and their challenges. As discussed in Qiao (1999), inter-state …scal disparities is considered a major concern in federations, creating equity and e¢ ciency related challenges. Boadway (2004), Boadway andShah (2009), andMartinez-Vazquez andSearle (2007) summarize the measures taken by federal governments to address these, most notably through equalization schemes, and the related challenges these present.…”

The Distributive Impact of Federal Fiscal Policy

“…The fiscal federalism literature provides some insight on the role of intergovernmental grants to redress problems of vertical inequity among individuals, or horizontal inequities between subnational governments (Musgrave 1959;Oates 1972;Musso 1998). Although fiscal equalization through intergovernmental grants has been less popular in the United States than in Australia, Canada, and Germany, there are several equity-and efficiency-related arguments in favor of such policy (Mieszkowski and Musgrave 1999;Qiao 1999). First, cities with diminished fiscal resources must impose higher relative tax rates to provide the same services, violating the normative criterion of horizontal equity.…”

Interstate fiscal disparities among american states: its general trend during 1970-1996 and its implications to the 1996 welfare reform

“…NOTES 4. For detailed explanations of these approaches and the advantages and disadvantages of each, see Qiao (1999).…”