The Uneasy Case for Devolution of the Individual Income Tax

Iowa Law Review

Volumn 85, Issue 3, 2000, Pages 907-995

  Strahilevitz, Lior Jacob ^a  

^a NONE

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EID: 0034375690     PISSN: 00210552     EISSN: None     Source Type: Journal    
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References (506)

1. MICHAEL J. BRADDICK, THE NERVES OF STATE: TAXATION AND THE FINANCING OF THE ENGLISH STATE, 1558-1714, at 91 (1996).
2. Id. at 92.
3. See infra text accompanying note 58 (noting that state and local governments collect 30% of all taxes).
4. Anne-Marie O'Connor, Forbes Is Forging Ahead in Iowa Campaign: He Builds Conservative Following on IRS, Abortion Issues, L.A. TIMES, Jan. 22, 2000, at A16 (quoting Steve Forbes).
5. See Senate Kills Bill To Scrap Tax Code, ROCKY MTN. NEWS, July 29, 1998, at 26A.
6. See Republicans Call for Tax and Education Efforts To Benefit Families, N.Y. TIMES, Jan. 20, 1999, at A23.
7. Nor would I suggest that we do so. The English system had serious drawbacks in that each year's tax-burden distribution was, at least in theory, up for grabs. This fact surely presented serious possibilities for the financial oppression of unpopular minorities or individuals within the community and needlessly caused communities to revisit the same contentious issues every year.
8. The reasons for my selection of the individual income tax should become clear during the discussion infra Part III. Note, however, that requisitions finance could be designed to replace not the federal individual income tax, but the federal payroll tax, the federal tax on corporate income, federal excise taxes, or any other significant source of federal revenue. Among these, only the federal payroll tax collects an amount of revenue comparable to that raised by the individual income tax. Thus, only a replacement of that tax (or the individual income tax) with requisitions finance would create the meaningful shift from federal to state tax collection described herein. However, the revenues generated by the payroll tax are currently earmarked for Social Security and Medicare benefits, and, at least with the former, a taxpayer's payments correlate with the benefits she will receive later in life. In addition, the payroll tax does not generate the massive compliance costs or the widespread resentment that the individual income tax does. See generally infra Parts III, IV. Hence, although the federal individual income tax and requisitions finance could exist side-by-side, this Article focuses on a scenario whereby the latter would replace the former.
9. A quick note about terminology: This Article refers to its proposed tax scheme as "requisitions finance," which is one way of devolving the federal individual income tax to the states. There are other ways by which taxing authority could be devolved to the states, but I have chosen to focus this Article on what I believe is the superior way of accomplishing that objective. That said, the Article will occasionally refer to its proposal as "devolution of the individual income tax" or "tax devolution" for stylistic purposes.
10. Such contributions would be necessary if, as seems likely, the federal government's remaining revenues would be insufficient to cover its expenses.
11. For a discussion of the costs and benefits of various other constraints that could be enacted by statute to address some of the drawbacks of a requisitions approach, see infra Part V.B.
12. See ARTICLES OF CONFEDERATION, art. VIII (1781) ("All charges of war, and all other expences that shall be incurred for the common defence or general welfare . . . shall be defrayed out of a common treasury, which shall be supplied by the several states in proportion to the value of all land within each state . . . as such land and the buildings and improvements thereon shall be estimated according to such mode as the united states in congress assembled, shall from time to time direct and appoint."). The dispute over whether land, property values, total population, or non-slave population should be the basis for requisitions was extremely contentious. The wealthier Northern states favored total population as the basis, while the poorer Southern states favored land values or white population. See generally MERRILL JENSEN, THE ARTICLES OF CONFEDERATION 145-50 (1940).
13. See ARTICLES OF CONFEDERATION, art. VIII (1781) ("All charges of war, and all other expences that shall be incurred for the common defence or general welfare . . . shall be defrayed out of a common treasury, which shall be supplied by the several states in proportion to the value of all land within each state . . . as such land and the buildings and improvements thereon shall be estimated according to such mode as the united states in congress assembled, shall from time to time direct and appoint."). The dispute over whether land, property values, total population, or non-slave population should be the basis for requisitions was extremely contentious. The wealthier Northern states favored total population as the basis, while the poorer Southern states favored land values or white population. See generally MERRILL JENSEN, THE ARTICLES OF CONFEDERATION 145-50 (1940).
14. See BRADDICK, supra note 1, at 91-109 (discussing poll, land, and income taxes).
15. SEE EDWIN A. SELIGMAN, THE INCOME TAX: A STUDY OF THE HISTORY, THEORY, AND PRACTICE OF INCOME TAXATION AT HOME AND ABROAD 367 (1911).
16. See id. at 368-84. States did not begin using what we would recognize as direct precursors to the modern income tax until the 1840s when they had to enact income taxes in order to pay off debts incurred to finance massive spending on public works projects. See id. at 399-400. Some Southern states later followed suit, but not because they had to pay off their debts. Rather, the early income-tax was adopted as an explicitly progressive means for raising revenue. See id. at 402.
17. See ROBERT A. BECKER, REVOLUTION, REFORM, AND THE POLITICS OF AMERICAN TAXATION, 1763-1783, at 41 (1980) ("Although none of this was apparent before 1776, one thing did seem certain: New Englanders would not look kindly on any challenge to their local autonomy over taxes, from whichever side of the Atlantic - and from whatever external government, English or American - it might come.").
18. Robert Becker best expresses these variations in state norms: So fundamentally did the states differ that any attempt to create a national basis for taxation would inevitably be burdensome and unjust to some. A fair and equitable tax in Delaware might be neither in Virginia. "The taxes cannot be uniform throughout the states without being oppressive to some," warned Virginia's William Grayson. Id. at 226.
19. See FORREST MCDONALD, Novus ORDO SECLORUM: THE INTELLECTUAL ORIGINS OF THE CONSTITUTION 170-71 (1985). Dall Forsythe describes the quandary faced by the young central government: Under the Articles of Confederation, extractive capacity was severely limited, and neither legal authority nor bureaucratic machinery existed to enforce the demands of the Continental Congress for revenues. Congress could not directly tax citizens or commerce, but instead could only ask state governments, through requisitions, to provide it with the funds it required. When the states were slow in paying their share, as was often the case, Congress had no coercive power to compel compliance, but was limited to whatever persuasive techniques it could devise to convince the state legislatures. DALL W. FORSYTHE, TAXATION AND POLITICAL CHANGE IN THE YOUNG NATION 1783-1833, at 14 (1997).
20. See FORREST MCDONALD, Novus ORDO SECLORUM: THE INTELLECTUAL ORIGINS OF THE CONSTITUTION 170-71 (1985). Dall Forsythe describes the quandary faced by the young central government: Under the Articles of Confederation, extractive capacity was severely limited, and neither legal authority nor bureaucratic machinery existed to enforce the demands of the Continental Congress for revenues. Congress could not directly tax citizens or commerce, but instead could only ask state governments, through requisitions, to provide it with the funds it required. When the states were slow in paying their share, as was often the case, Congress had no coercive power to compel compliance, but was limited to whatever persuasive techniques it could devise to convince the state legislatures. DALL W. FORSYTHE, TAXATION AND POLITICAL CHANGE IN THE YOUNG NATION 1783-1833, at 14 (1997).
21. See ROGER H. BROWN, REDEEMING THE REPUBLIC: FEDERALISTS, TAXATION, AND THE ORIGINS OF THE CONSTITUTION 12 (1993); DONALD R. STABILE, THE ORIGINS OF AMERICAN PUBLIC FINANCE: DEBATES OVER MONEY, DEBT, AND TAXES IN THE CONSTITUTIONAL ERA, 1776-1836, at 45 (1998).
22. See ROGER H. BROWN, REDEEMING THE REPUBLIC: FEDERALISTS, TAXATION, AND THE ORIGINS OF THE CONSTITUTION 12 (1993); DONALD R. STABILE, THE ORIGINS OF AMERICAN PUBLIC FINANCE: DEBATES OVER MONEY, DEBT, AND TAXES IN THE CONSTITUTIONAL ERA, 1776-1836, at 45 (1998).
23. See STABILE, supra note 19, at 46-48; Jacques LeBoeuf, The Economics of Federalism and the Proper Scope of the Federal Commerce Power, 31 SAN DIEGO L. REV. 555, 594 (1994) ("While each state had an interest in obtaining the public goods that the federal government would provide, it was in the interest of no state to contribute to the federal coffers.").
24. See STABILE, supra note 19, at 46-48; Jacques LeBoeuf, The Economics of Federalism and the Proper Scope of the Federal Commerce Power, 31 SAN DIEGO L. REV. 555, 594 (1994) ("While each state had an interest in obtaining the public goods that the federal government would provide, it was in the interest of no state to contribute to the federal coffers.").
25. See ARTICLES OF CONFEDERATION, art. IX (1781) ("The united states in congress assembled shall have authority . . . to make requisitions from each state for its quota, in proportion to the number of white inhabitants in such state; which requisitions shall be binding, and thereupon the legislature of each state shall appoint the regimental officers, raise the men and cloathe, arm and equip them in a soldier like manner, at the expence of the united states."); Kraig James Powell, The Other Double Standard: Communitarianism, Federalism, and American Constitutional Law, 7 SETON HALL CONST. L.J. 69, 83 (1996) (explaining this nationalsecurity drawback).
26. See ARTICLES OF CONFEDERATION, art. IX (1781) ("The united states in congress assembled shall have authority . . . to make requisitions from each state for its quota, in proportion to the number of white inhabitants in such state; which requisitions shall be binding, and thereupon the legislature of each state shall appoint the regimental officers, raise the men and cloathe, arm and equip them in a soldier like manner, at the expence of the united states."); Kraig James Powell, The Other Double Standard: Communitarianism, Federalism, and American Constitutional Law, 7 SETON HALL CONST. L.J. 69, 83 (1996) (explaining this nationalsecurity drawback).
27. As James Maxwell has observed: The results [of Congress's reliance on requisitions] were nearly disastrous, and yet attempts to strengthen the financial powers of Congress by amending the Articles of Confederation failed because of the requirement of state unanimity. The feeling grew that the Articles provided the wrong kind of government. A strong nation would emerge only with a government that could levy taxes for its own use through its own officers. JAMES A. MAXWELL, FINANCING STATE AND LOCAL GOVERNMENTS 12 (1965). Readers searching for a modern parallel should note the similarities between the financial difficulties encountered by the early American republic and the modern United Nations. In both instances the central government lacked supremacy over the sovereign states, rendering it unable to force these states to contribute badly needed revenue.
28. See MAX FARRAND, THE FRAMING OF THE CONSTITUTION OF THE UNITED STATES 5 (1913) (noting that Rhode Island's veto killed a 1781 tariff that the other 12 states had favored); STABILE, supra note 19, at 32, 42-43. When, in 1789, the new federal government finally obtained this authority, the tariff accounted for nearly all of the federal government's revenues, with the remainder coming from land sales. See U.S. DEP'T OF COMMERCE, 2 HISTORICAL STATISTICS OF THE UNITED STATES: COLONIAL TIMES TO 1970, at 1106 (1989). The tariff remained the nation's primary revenue source until 1864, and again from 1869 to 1893. See id.
29. See MAX FARRAND, THE FRAMING OF THE CONSTITUTION OF THE UNITED STATES 5 (1913) (noting that Rhode Island's veto killed a 1781 tariff that the other 12 states had favored); STABILE, supra note 19, at 32, 42-43. When, in 1789, the new federal government finally obtained this authority, the tariff accounted for nearly all of the federal government's revenues, with the remainder coming from land sales. See U.S. DEP'T OF COMMERCE, 2 HISTORICAL STATISTICS OF THE UNITED STATES: COLONIAL TIMES TO 1970, at 1106 (1989). The tariff remained the nation's primary revenue source until 1864, and again from 1869 to 1893. See id.
30. See MAX FARRAND, THE FRAMING OF THE CONSTITUTION OF THE UNITED STATES 5 (1913) (noting that Rhode Island's veto killed a 1781 tariff that the other 12 states had favored); STABILE, supra note 19, at 32, 42-43. When, in 1789, the new federal government finally obtained this authority, the tariff accounted for nearly all of the federal government's revenues, with the remainder coming from land sales. See U.S. DEP'T OF COMMERCE, 2 HISTORICAL STATISTICS OF THE UNITED STATES: COLONIAL TIMES TO 1970, at 1106 (1989). The tariff remained the nation's primary revenue source until 1864, and again from 1869 to 1893. See id.
31. FORSYTHE, supra note 18, at 15.
32. See THE FEDERALIST No. 30, at 189-92 (Alexander Hamilton) (Clinton Rossiter ed., 1961) (arguing that reliance on requisitions alone had rendered the new nation impotent and vulnerable).
33. See, e.g., FARRAND, supra note 23, at 47; STABILE, supra note 19, at 47; Eric M. Freedman, Why Constitutional Lawyers and Historians Should Take a Fresh Look at the Emergence of the Constitution from the Confederation Period: The Case of the Drafting of the Articles of Confederation, 60 TENN. L. REV. 783, 790 (1994).
34. See, e.g., FARRAND, supra note 23, at 47; STABILE, supra note 19, at 47; Eric M. Freedman, Why Constitutional Lawyers and Historians Should Take a Fresh Look at the Emergence of the Constitution from the Confederation Period: The Case of the Drafting of the Articles of Confederation, 60 TENN. L. REV. 783, 790 (1994).
35. See, e.g., FARRAND, supra note 23, at 47; STABILE, supra note 19, at 47; Eric M. Freedman, Why Constitutional Lawyers and Historians Should Take a Fresh Look at the Emergence of the Constitution from the Confederation Period: The Case of the Drafting of the Articles of Confederation, 60 TENN. L. REV. 783, 790 (1994).
36. See Erik M. Jensen, The Apportionment of 'Direct Taxes': Are Consumption Taxes Constitutional?, 97 COLUM. L. REV. 2334, 2398-99 (1997).
37. Id.
38. See U.S. CONST, art. I, § 8, cl. 1 ("The Congress shall have the Power To lay and collect Taxes . . . .").
39. See BECKER, supra note 16, at 228 (noting that the states' past "refusals to meet congressional requisitions" demonstrated to many that only "a superior government beyond the reach of the state legislatures" could flourish).
40. See Jensen, supra note 27, at 2399 (citing 1 ANNALS OF CONG. 773 (Joseph Gales ed., 1834)).
41. See Jensen, supra note 27, at 2399 (citing 1 ANNALS OF CONG. 773 (Joseph Gales ed., 1834)).
42. See U.S. DEP'T OF COMMERCE, supra note 23, at 1106.
43. Erik Jensen initially raised this possibility, but noted that it is "not necessarily" the case. Jensen, supra note 27, at 2400. Upon a rigorous examination in a subsequent work, he concluded that requisitions are constitutionally permitted. See Erik M. Jensen & Jonathan L. Entin, Commandeering, the Tenth Amendment, and the Federal Requisition Power: New York v. United States Revisited, 15 CONST. COMMENT. 355, 379 (1998) ("In short, there is substantial evidence that the Constitution left intact the federal government's power to impose requisitions on the states. This evidence reflects the views of both supporters and opponents of ratification, and this understanding persisted beyond the time of the framing."). Because recent Supreme Court decisions on the powers of the federal government to compel the states to administer federal programs briefly explored the history of requisitions for clues about whether Congress can now compel the states to act in a certain way, see Printz v. United States, 521 U.S. 898 (1997); New York v. United States, 505 U.S. 144 (1992), requisitions' constitutionality has been the subject of new scholarship. Some of it, like Jensen & Entin's work, is exhaustive and impressive. One careless paragraph, however, in an otherwise insightful article, essentially ignored the historical evidence provided here and concluded, with little justification, that an originalist interpretation of the Constitution bars Congress from reclaiming the requisitions tool. See Saikrishna Bangalore Prakash, Field Office Federalism, 79 VA. L. REV. 1957, 1988-89 (1993). In any event, unlike these scholars, I am more interested in the constitutionality of requisitions for their own sake, rather than the historical implications of requisitions finance for general principles of federalism.
44. Erik Jensen initially raised this possibility, but noted that it is "not necessarily" the case. Jensen, supra note 27, at 2400. Upon a rigorous examination in a subsequent work, he concluded that requisitions are constitutionally permitted. See Erik M. Jensen & Jonathan L. Entin, Commandeering, the Tenth Amendment, and the Federal Requisition Power: New York v. United States Revisited, 15 CONST. COMMENT. 355, 379 (1998) ("In short, there is substantial evidence that the Constitution left intact the federal government's power to impose requisitions on the states. This evidence reflects the views of both supporters and opponents of ratification, and this understanding persisted beyond the time of the framing."). Because recent Supreme Court decisions on the powers of the federal government to compel the states to administer federal programs briefly explored the history of requisitions for clues about whether Congress can now compel the states to act in a certain way, see Printz v. United States, 521 U.S. 898 (1997); New York v. United States, 505 U.S. 144 (1992), requisitions' constitutionality has been the subject of new scholarship. Some of it, like Jensen & Entin's work, is exhaustive and impressive. One careless paragraph, however, in an otherwise insightful article, essentially ignored the historical evidence provided here and concluded, with little justification, that an originalist interpretation of the Constitution bars Congress from reclaiming the requisitions tool. See Saikrishna Bangalore Prakash, Field Office Federalism, 79 VA. L. REV. 1957, 1988-89 (1993). In any event, unlike these scholars, I am more interested in the constitutionality of requisitions for their own sake, rather than the historical implications of requisitions finance for general principles of federalism.
45. Erik Jensen initially raised this possibility, but noted that it is "not necessarily" the case. Jensen, supra note 27, at 2400. Upon a rigorous examination in a subsequent work, he concluded that requisitions are constitutionally permitted. See Erik M. Jensen & Jonathan L. Entin, Commandeering, the Tenth Amendment, and the Federal Requisition Power: New York v. United States Revisited, 15 CONST. COMMENT. 355, 379 (1998) ("In short, there is substantial evidence that the Constitution left intact the federal government's power to impose requisitions on the states. This evidence reflects the views of both supporters and opponents of ratification, and this understanding persisted beyond the time of the framing."). Because recent Supreme Court decisions on the powers of the federal government to compel the states to administer federal programs briefly explored the history of requisitions for clues about whether Congress can now compel the states to act in a certain way, see Printz v. United States, 521 U.S. 898 (1997); New York v. United States, 505 U.S. 144 (1992), requisitions' constitutionality has been the subject of new scholarship. Some of it, like Jensen & Entin's work, is exhaustive and impressive. One careless paragraph, however, in an otherwise insightful article, essentially ignored the historical evidence provided here and concluded, with little justification, that an originalist interpretation of the Constitution bars Congress from reclaiming the requisitions tool. See Saikrishna Bangalore Prakash, Field Office Federalism, 79 VA. L. REV. 1957, 1988-89 (1993). In any event, unlike these scholars, I am more interested in the constitutionality of requisitions for their own sake, rather than the historical implications of requisitions finance for general principles of federalism.
46. Erik Jensen initially raised this possibility, but noted that it is "not necessarily" the case. Jensen, supra note 27, at 2400. Upon a rigorous examination in a subsequent work, he concluded that requisitions are constitutionally permitted. See Erik M. Jensen & Jonathan L. Entin, Commandeering, the Tenth Amendment, and the Federal Requisition Power: New York v. United States Revisited, 15 CONST. COMMENT. 355, 379 (1998) ("In short, there is substantial evidence that the Constitution left intact the federal government's power to impose requisitions on the states. This evidence reflects the views of both supporters and opponents of ratification, and this understanding persisted beyond the time of the framing."). Because recent Supreme Court decisions on the powers of the federal government to compel the states to administer federal programs briefly explored the history of requisitions for clues about whether Congress can now compel the states to act in a certain way, see Printz v. United States, 521 U.S. 898 (1997); New York v. United States, 505 U.S. 144 (1992), requisitions' constitutionality has been the subject of new scholarship. Some of it, like Jensen & Entin's work, is exhaustive and impressive. One careless paragraph, however, in an otherwise insightful article, essentially ignored the historical evidence provided here and concluded, with little justification, that an originalist interpretation of the Constitution bars Congress from reclaiming the requisitions tool. See Saikrishna Bangalore Prakash, Field Office Federalism, 79 VA. L. REV. 1957, 1988-89 (1993). In any event, unlike these scholars, I am more interested in the constitutionality of requisitions for their own sake, rather than the historical implications of requisitions finance for general principles of federalism.
47. Erik Jensen initially raised this possibility, but noted that it is "not necessarily" the case. Jensen, supra note 27, at 2400. Upon a rigorous examination in a subsequent work, he concluded that requisitions are constitutionally permitted. See Erik M. Jensen & Jonathan L. Entin, Commandeering, the Tenth Amendment, and the Federal Requisition Power: New York v. United States Revisited, 15 CONST. COMMENT. 355, 379 (1998) ("In short, there is substantial evidence that the Constitution left intact the federal government's power to impose requisitions on the states. This evidence reflects the views of both supporters and opponents of ratification, and this understanding persisted beyond the time of the framing."). Because recent Supreme Court decisions on the powers of the federal government to compel the states to administer federal programs briefly explored the history of requisitions for clues about whether Congress can now compel the states to act in a certain way, see Printz v. United States, 521 U.S. 898 (1997); New York v. United States, 505 U.S. 144 (1992), requisitions' constitutionality has been the subject of new scholarship. Some of it, like Jensen & Entin's work, is exhaustive and impressive. One careless paragraph, however, in an otherwise insightful article, essentially ignored the historical evidence provided here and concluded, with little justification, that an originalist interpretation of the Constitution bars Congress from reclaiming the requisitions tool. See Saikrishna Bangalore Prakash, Field Office Federalism, 79 VA. L. REV. 1957, 1988-89 (1993). In any event, unlike these scholars, I am more interested in the constitutionality of requisitions for their own sake, rather than the historical implications of requisitions finance for general principles of federalism.
48. THE FEDERALIST No. 36, at 220 (Alexander Hamilton) (Clinton Rossiter ed., 1961).
49. See id. at 221 ("[T]he existence of such a power [of internal taxation] in the Constitution will have a strong influence in giving efficacy to requisitions. When the States know that the Union can supply itself without their agency, it will be a powerful motive for exertion on their part."); see also Roderick M. Hills, Jr., The Political Economy of Cooperative Federalism: Why State Autonomy Makes Sense and "Dual Sovereignty" Doesn't, 96 MICH. L. REV. 813, 837 (1997) ("Publius recommends a classic strategy of cooperative federalism: threaten to bypass state officials unless they comply with federal requisitions.").
50. See George Mason, Speech in the Virginia State Ratifying Convention (June 4, 1788), in 5 THE COMPLETE ANTI-FEDERALIST 259 (Herbert J. Storing ed., 1981).
51. See HARRY EDWIN SMITH, THE UNITED STATES FEDERAL INTERNAL TAX HISTORY FROM 1861 TO 1871, at 22 (1914); Jensen, supra note 27, at 2402.
52. See HARRY EDWIN SMITH, THE UNITED STATES FEDERAL INTERNAL TAX HISTORY FROM 1861 TO 1871, at 22 (1914); Jensen, supra note 27, at 2402.
53. For a persuasive argument that "direct taxes" should include nothing beyond land and poll taxes, see Bruce Ackerman, Taxation and the Constitution, 99 COLUM. L. REV. 1, 15 n.50 (1999).
54. Letter from James Madison to George Thomson (Jan. 29, 1789), reprinted in 2 THE FRAMERS' CONSTITUTION 440 (Philip B. Kurland & Ralph Lerner eds., 1987).
55. U.S. CONST, art 1, § 8, cl. 1. There is language in the Supreme Court's recent Printz opinion that could be read to imply that Congress would need the states' consent in order to use their tax apparatuses to collect federal revenues, which could be construed broadly to apply to requisitions. See Printz v. United States, 521 U.S. 898, 910-11 (1997) ("'Publius' responded that Congress will probably 'make use of the State officers and State regulations, for collecting' federal taxes. . . . But none of these statements necessarily implies - what is the critical point here - that Congress could impose these responsibilities without the consent of the States."). However, even if this language were thought to trump the historical evidence offered above, requisitions finance would not be endangered for the simple reason that the states would jump at the possibility of gaining the flexibility inherent in such a decentralized approach. Cf. E. Blaine Liner, Sorting Out Stale-Local Relations, in A DECADE OF DEVOLUTION: PERSPECTIVES ON STATE-LOCAL RELATIONS 3, 7 (E. Blaine Liner ed., 1989) [hereinafter A DECADE OF DEVOLUTION] ("For the most part, states . . . welcomed the opportunity to move toward center stage. In general, states were eager to increase their control over the functions they carry out and most of them have been well-prepared to do so.").
56. U.S. CONST, art 1, § 8, cl. 1. There is language in the Supreme Court's recent Printz opinion that could be read to imply that Congress would need the states' consent in order to use their tax apparatuses to collect federal revenues, which could be construed broadly to apply to requisitions. See Printz v. United States, 521 U.S. 898, 910-11 (1997) ("'Publius' responded that Congress will probably 'make use of the State officers and State regulations, for collecting' federal taxes. . . . But none of these statements necessarily implies - what is the critical point here - that Congress could impose these responsibilities without the consent of the States."). However, even if this language were thought to trump the historical evidence offered above, requisitions finance would not be endangered for the simple reason that the states would jump at the possibility of gaining the flexibility inherent in such a decentralized approach. Cf. E. Blaine Liner, Sorting Out Stale-Local Relations, in A DECADE OF DEVOLUTION: PERSPECTIVES ON STATE-LOCAL RELATIONS 3, 7 (E. Blaine Liner ed., 1989) [hereinafter A DECADE OF DEVOLUTION] ("For the most part, states . . . welcomed the opportunity to move toward center stage. In general, states were eager to increase their control over the functions they carry out and most of them have been well-prepared to do so.").
57. In such an instance, even if requisitions were direct taxes, they would be constitutionally authorized. See U.S. CONST. art. I, § 2, cl. 3.
58. Cf. Nelson Lund, Comment, The Uniformity Clause, 51 U. CHI. L. REV. 1193, 1207 (1984) (concluding that the Supreme Court has interpreted the Uniformity Clause as a very narrow and rarely implicated limitation on congressional taxing authority). I discuss the complications that might arise if Congress had to determine how a modern requisition would be apportioned among the states infra text accompanying notes 356-357.
59. But see SMITH, supra note 37, at 22 (arguing that the 37th Congress was concerned about enacting a requisition because of the Constitution's failure to include requisition authority among Congress' enumerated powers).
60. Cf. Printz, 521 U.S. at 939, 945 (Stevens, J., dissenting) (noting that requisitions finance under the Articles of Confederation "proved to be unacceptable, not because it demeaned the sovereign character of the several States, but rather because it was cumbersome and inefficient").
61. Jensen, supra note 27, at 2401. In 1861 Congress considered, and almost adopted, a requisition bill in place of a somewhat unpopular bill to enact a direct tax. See CONG. GLOBE, 37th Cong., 1st Sess. 247 (1861); SMITH, supra note 37, at 21-22.
62. Jensen, supra note 27, at 2401. In 1861 Congress considered, and almost adopted, a requisition bill in place of a somewhat unpopular bill to enact a direct tax. See CONG. GLOBE, 37th Cong., 1st Sess. 247 (1861); SMITH, supra note 37, at 21-22.
63. Jensen, supra note 27, at 2401. In 1861 Congress considered, and almost adopted, a requisition bill in place of a somewhat unpopular bill to enact a direct tax. See CONG. GLOBE, 37th Cong., 1st Sess. 247 (1861); SMITH, supra note 37, at 21-22.
64. Congress' power virtually to dictate state policy by conditioning the receipt of federal funds on the adoption of federally-favored policies has been upheld by the Supreme Court. See South Dakota v. Dole, 483 U.S. 203 (1987); see also Richard Briffault, Federalism and Health Care Reform: Is Half a Loaf Really Worse than None?, 21 HASTINGS CONST. L. Q. 611, 626 (1994) (noting that Dole was cited with approval by subsequent opinions that were dubious of other forms of federal regulation over state affairs).
65. Congress' power virtually to dictate state policy by conditioning the receipt of federal funds on the adoption of federally-favored policies has been upheld by the Supreme Court. See South Dakota v. Dole, 483 U.S. 203 (1987); see also Richard Briffault, Federalism and Health Care Reform: Is Half a Loaf Really Worse than None?, 21 HASTINGS CONST. L. Q. 611, 626 (1994) (noting that Dole was cited with approval by subsequent opinions that were dubious of other forms of federal regulation over state affairs).
66. To the extent that such doubts linger, Part II of this Article should allay them.
67. See infra notes 58-60 and accompanying text (noting that the state and local taxes currently account for 30% of all taxes collected, while the federal government only collected 18% of all taxes in 1900).
68. See Ellen P. Aprill, Excluding the Income of State and Local Governments: The Need for Congressional Action, 26 GA. L. REV. 421, 475 n.228 (1992) (providing statistics on levels of federal grants to the states).
69. See Michael E. Parrish, The Great Depression, the New Deal, and the American Legal Order, 59 WASH. L. REV. 723, 727 (1984) ("[F]or the first time, the national government became the chief custodian of both economic security and social justice for all citizens."); Richard B. Stewart, Madison's Nightmare, 57 U CHI. L. REV. 335, 337 (1990) (noting that the New Deal's redistributive efforts were a response to the states' inabilities to meet the growing demand for social assistance). Harry Scheiber notes that this centralization trend began, on a much smaller scale, during the Progressive Era. Harry N. Scheiber, Redesigning the Architecture of Federalism - An American Tradition: Modern Devolution Policies in Perspective, 13 YALE J. REG. 227, 250 (1996).
70. See Michael E. Parrish, The Great Depression, the New Deal, and the American Legal Order, 59 WASH. L. REV. 723, 727 (1984) ("[F]or the first time, the national government became the chief custodian of both economic security and social justice for all citizens."); Richard B. Stewart, Madison's Nightmare, 57 U CHI. L. REV. 335, 337 (1990) (noting that the New Deal's redistributive efforts were a response to the states' inabilities to meet the growing demand for social assistance). Harry Scheiber notes that this centralization trend began, on a much smaller scale, during the Progressive Era. Harry N. Scheiber, Redesigning the Architecture of Federalism - An American Tradition: Modern Devolution Policies in Perspective, 13 YALE J. REG. 227, 250 (1996).
71. See Michael E. Parrish, The Great Depression, the New Deal, and the American Legal Order, 59 WASH. L. REV. 723, 727 (1984) ("[F]or the first time, the national government became the chief custodian of both economic security and social justice for all citizens."); Richard B. Stewart, Madison's Nightmare, 57 U CHI. L. REV. 335, 337 (1990) (noting that the New Deal's redistributive efforts were a response to the states' inabilities to meet the growing demand for social assistance). Harry Scheiber notes that this centralization trend began, on a much smaller scale, during the Progressive Era. Harry N. Scheiber, Redesigning the Architecture of Federalism - An American Tradition: Modern Devolution Policies in Perspective, 13 YALE J. REG. 227, 250 (1996).
72. See U.S. DEP'T OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 334 (1995).
73. Among user fees, the vast majority of revenue collected were tuition and other payments for higher education, payments to public hospitals, and toll road fees.
74. Miscellaneous revenue consisted mostly of interest earnings, lottery revenues, and donations from private sources.
75. "Taken as a whole" means that local taxes, consisting mostly of property taxes, are included. Some states, such as Massachusetts and New Mexico, had rather progressive personal income taxes, but highly regressive property tax regimes. See Roger J. Vaughan, State Taxation and Economic Development, in STATE TAXATION POLICY 3, 42 tbl.7 (Michael Barker ed., 1983).
76. See id. at 44 (describing the vertical and horizontal inequity of current tax regimes).
77. See William F. Fox, The Personal Income Tax as a Component of State Tax Structure, 39 VAND. L. REV. 1081, 1083 (1986) (noting that 33 states have their own progressive tax structure); see also U.S. TREASURY DEP'T, DIVISION OF TAX RESEARCH, FEDERAL-STATE TAX COORDINATION 3 (1947) (demonstrating the historical tendency of states to use progressive rate structures).
78. See William F. Fox, The Personal Income Tax as a Component of State Tax Structure, 39 VAND. L. REV. 1081, 1083 (1986) (noting that 33 states have their own progressive tax structure); see also U.S. TREASURY DEP'T, DIVISION OF TAX RESEARCH, FEDERAL-STATE TAX COORDINATION 3 (1947) (demonstrating the historical tendency of states to use progressive rate structures).
79. See Fox, supra note 56, at 1091 (noting regressivity in "essentially every case," even when necessities are excluded from the base); Robert H. Gleason, Reevaluating the California Sales Tax: Exemptions, Equity, Effectiveness, and the Need for a Broader Base, 33 SAN DIEGO L. REV. 1681, 1696 n.55 (1996).
80. See Fox, supra note 56, at 1091 (noting regressivity in "essentially every case," even when necessities are excluded from the base); Robert H. Gleason, Reevaluating the California Sales Tax: Exemptions, Equity, Effectiveness, and the Need for a Broader Base, 33 SAN DIEGO L. REV. 1681, 1696 n.55 (1996).
81. See DANIEL SHAVIRO, FEDERALISM IN TAXATION: THE CASE FOR GREATER UNIFORMITY 1 (1993).
82. See RANDALL G. HOLCOMBE & RUSSELL S. SOBEL, GROWTH AND VARIABILITY IN STATE TAX REVENUE: AN ANATOMY OF STATE FISCAL CRISES 3 (1997).
83. See Vaughan, supra note 54, at 28. Tax collections correlated roughly with these spending figures.
84. In 1902 states relied on property taxes for more than half of their revenues. By 1927 state reliance on the income tax was increasing, but reliance on users fees and miscellaneous forms of taxation formed the primary source of state revenue. See MAXWELL, supra note 22, at 242. Data from 1930 shows that taxes on motor fuel were actually the single largest source of state revenue, followed by general property taxes, and motor vehicle licenses. See U.S. DEP'T OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 205 (1935). The sales tax, probably the most regressive of the major state taxes, did not come into being until 1930, when Mississippi introduced one. See William F. Fox, Can the State Sales Tax Survive a Future Like Its Past?, in THE FUTURE OF STATE TAXATION 33, 33 (David Brunori ed., 1998).
85. In 1902 states relied on property taxes for more than half of their revenues. By 1927 state reliance on the income tax was increasing, but reliance on users fees and miscellaneous forms of taxation formed the primary source of state revenue. See MAXWELL, supra note 22, at 242. Data from 1930 shows that taxes on motor fuel were actually the single largest source of state revenue, followed by general property taxes, and motor vehicle licenses. See U.S. DEP'T OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 205 (1935). The sales tax, probably the most regressive of the major state taxes, did not come into being until 1930, when Mississippi introduced one. See William F. Fox, Can the State Sales Tax Survive a Future Like Its Past?, in THE FUTURE OF STATE TAXATION 33, 33 (David Brunori ed., 1998).
86. In 1902 states relied on property taxes for more than half of their revenues. By 1927 state reliance on the income tax was increasing, but reliance on users fees and miscellaneous forms of taxation formed the primary source of state revenue. See MAXWELL, supra note 22, at 242. Data from 1930 shows that taxes on motor fuel were actually the single largest source of state revenue, followed by general property taxes, and motor vehicle licenses. See U.S. DEP'T OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 205 (1935). The sales tax, probably the most regressive of the major state taxes, did not come into being until 1930, when Mississippi introduced one. See William F. Fox, Can the State Sales Tax Survive a Future Like Its Past?, in THE FUTURE OF STATE TAXATION 33, 33 (David Brunori ed., 1998).
87. See infra note 325 and accompanying text (citing authorities who have recognized this trade-off).
88. See Harvey Galper & Stephen H. Pollock, Models of State Income Tax Reform, in THE UNFINISHED AGENDA FOR STATE TAX REFORM 107, 124 (Steven D. Gold ed., 1988) (comparing indexes of progressivity).
89. See infra Part III.F.
90. RONALD JOHN HY & WILLIAM L. WAUGH, JR., STATE AND LOCAL TAX POLICIES: A COMPARATIVE HANDBOOK 59-61 (1995). For a complete explanation of what states use what forms of taxation, see ADVISORY COMM'N ON INTERGOVERNMENTAL RELATIONS, 1 SIGNIFICANT FEATURES OF FISCAL FEDERALISM: BUDGET PROCESSES AND TAX SYSTEMS 34-35 (1995).
91. RONALD JOHN HY & WILLIAM L. WAUGH, JR., STATE AND LOCAL TAX POLICIES: A COMPARATIVE HANDBOOK 59-61 (1995). For a complete explanation of what states use what forms of taxation, see ADVISORY COMM'N ON INTERGOVERNMENTAL RELATIONS, 1 SIGNIFICANT FEATURES OF FISCAL FEDERALISM: BUDGET PROCESSES AND TAX SYSTEMS 34-35 (1995).
92. See HY & WAUGH, supra note 65, at 4.
93. Alaska's numbers may also be misleading because a large number of its residents are eligible to receive annual payments from the state government, reflecting the state's bountiful income from its natural resources. See generally Laurence C. Smith, Note, A Proposed Solution to the Federal Taxation of Alaska Permanent Fund Dividend Payments, 11 ALASKA L. REV. 97 (1994) (discussing the payments and their treatment under the federal income tax).
94. See HY & WAUGH, supra note 65, at 4 (supplying the numbers used in this calculation). On the other hand, neighboring states sometimes have tax differentials of a few hundred dollars per capita. For example, less than $350 separates Maryland from Virginia, and Kansas from Missouri; less than $150 separates Ohio from Kentucky; and less than $60 separates Alabama from Mississippi. See id.
95. Since the enactment of the 1986 federal Tax Reform Act, state and local general sales taxes have not been deductible. See Daphne A. Kenyon, Reforming State Policies That Affect Local Taxing and Borrowing, in A DECADE OF DEVOLUTION, supra note 40, at 223, 245.
96. See, e.g., ALBERT BRETON, THE ECONOMIC THEORY OF REPRESENTATIVE GOVERNMENT 112-13 (1974) ("Indeed, the studies we possess of the effect of taxes on the supply of labor all indicate that this effect is small or nonexistent."); WALLACE E. OATES, FISCAL FEDERALISM 143 (1974) ("For relatively large provinces or states, for example, labor may be, for all practical purposes, immobile with respect to modest levels of taxation of personal income."); Benjamin Bridges, Jr., Allowances for State and Local Nonbusiness Taxes, in ESSAYS IN FISCAL FEDERALISM 187, 214 (Richard A. Musgrave ed., 1965) ("[P]oliticians and voters believe that changes in interstate income tax differentials significantly affect citizens' choices of residence, place of work, and business location. This belief may or may not be justified . . . for personal income taxes."); Andrew Reschovsky, The Progressively of State Tax Systems, in THE FUTURE OF STATE TAXATION, supra note 61, at 161, 163; Vaughan, supra note 54, at 109 (concluding that the evidence that rich individuals move from one state to another to reduce tax burdens is weak).
97. See, e.g., ALBERT BRETON, THE ECONOMIC THEORY OF REPRESENTATIVE GOVERNMENT 112-13 (1974) ("Indeed, the studies we possess of the effect of taxes on the supply of labor all indicate that this effect is small or nonexistent."); WALLACE E. OATES, FISCAL FEDERALISM 143 (1974) ("For relatively large provinces or states, for example, labor may be, for all practical purposes, immobile with respect to modest levels of taxation of personal income."); Benjamin Bridges, Jr., Allowances for State and Local Nonbusiness Taxes, in ESSAYS IN FISCAL FEDERALISM 187, 214 (Richard A. Musgrave ed., 1965) ("[P]oliticians and voters believe that changes in interstate income tax differentials significantly affect citizens' choices of residence, place of work, and business location. This belief may or may not be justified . . . for personal income taxes."); Andrew Reschovsky, The Progressively of State Tax Systems, in THE FUTURE OF STATE TAXATION, supra note 61, at 161, 163; Vaughan, supra note 54, at 109 (concluding that the evidence that rich individuals move from one state to another to reduce tax burdens is weak).
98. See, e.g., ALBERT BRETON, THE ECONOMIC THEORY OF REPRESENTATIVE GOVERNMENT 112-13 (1974) ("Indeed, the studies we possess of the effect of taxes on the supply of labor all indicate that this effect is small or nonexistent."); WALLACE E. OATES, FISCAL FEDERALISM 143 (1974) ("For relatively large provinces or states, for example, labor may be, for all practical purposes, immobile with respect to modest levels of taxation of personal income."); Benjamin Bridges, Jr., Allowances for State and Local Nonbusiness Taxes, in ESSAYS IN FISCAL FEDERALISM 187, 214 (Richard A. Musgrave ed., 1965) ("[P]oliticians and voters believe that changes in interstate income tax differentials significantly affect citizens' choices of residence, place of work, and business location. This belief may or may not be justified . . . for personal income taxes."); Andrew Reschovsky, The Progressively of State Tax Systems, in THE FUTURE OF STATE TAXATION, supra note 61, at 161, 163; Vaughan, supra note 54, at 109 (concluding that the evidence that rich individuals move from one state to another to reduce tax burdens is weak).
99. See, e.g., ALBERT BRETON, THE ECONOMIC THEORY OF REPRESENTATIVE GOVERNMENT 112-13 (1974) ("Indeed, the studies we possess of the effect of taxes on the supply of labor all indicate that this effect is small or nonexistent."); WALLACE E. OATES, FISCAL FEDERALISM 143 (1974) ("For relatively large provinces or states, for example, labor may be, for all practical purposes, immobile with respect to modest levels of taxation of personal income."); Benjamin Bridges, Jr., Allowances for State and Local Nonbusiness Taxes, in ESSAYS IN FISCAL FEDERALISM 187, 214 (Richard A. Musgrave ed., 1965) ("[P]oliticians and voters believe that changes in interstate income tax differentials significantly affect citizens' choices of residence, place of work, and business location. This belief may or may not be justified . . . for personal income taxes."); Andrew Reschovsky, The Progressively of State Tax Systems, in THE FUTURE OF STATE TAXATION, supra note 61, at 161, 163; Vaughan, supra note 54, at 109 (concluding that the evidence that rich individuals move from one state to another to reduce tax burdens is weak).
100. See, e.g., ALBERT BRETON, THE ECONOMIC THEORY OF REPRESENTATIVE GOVERNMENT 112-13 (1974) ("Indeed, the studies we possess of the effect of taxes on the supply of labor all indicate that this effect is small or nonexistent."); WALLACE E. OATES, FISCAL FEDERALISM 143 (1974) ("For relatively large provinces or states, for example, labor may be, for all practical purposes, immobile with respect to modest levels of taxation of personal income."); Benjamin Bridges, Jr., Allowances for State and Local Nonbusiness Taxes, in ESSAYS IN FISCAL FEDERALISM 187, 214 (Richard A. Musgrave ed., 1965) ("[P]oliticians and voters believe that changes in interstate income tax differentials significantly affect citizens' choices of residence, place of work, and business location. This belief may or may not be justified . . . for personal income taxes."); Andrew Reschovsky, The Progressively of State Tax Systems, in THE FUTURE OF STATE TAXATION, supra note 61, at 161, 163; Vaughan, supra note 54, at 109 (concluding that the evidence that rich individuals move from one state to another to reduce tax burdens is weak).
101. In principle, there is little reason why requisitions cannot be overlaid in the United States' current fiscal scheme. For example, if the federal government needs a new revenue source to finance a war, it could keep current federal taxes at their current levels and call upon the state governments to deliver the extra revenue. Such a scheme, however, would be a poor cousin of the vigorous requisitions approach envisioned by die colonial Americans. For requisitions to truly matter, and for the scheme to bring about the advantages discussed below, it would have to be a primary, rather than a secondary, source of revenue for the federal government.
102. In order to make up some of the revenue, Congress might pass legislation, under its Commerce Clause authority, that prohibits states from taxing corporate incomes. Congress could then raise the federal corporate tax by an amount equal to the amount that the states would lose from the state taxes on corporations. Currently, the states raise four and one half times more revenue through taxing personal income than through taxes on corporate income. See HOLCOMBE & SOBEL, supra note 59, at 36; see also CAROLYN WEBBER & AARON WILDAVSKY, A HISTORY OF TAXATION AND EXPENDITURE IN THE WESTERN WORLD 552-55 (1986) (explaining why even progressive states are unlikely to rely heavily on taxing corporate income). Accordingly, unless the federal government was willing to operate with drastically reduced revenues, some requisitions would be necessary, even after such a swap of taxation bases. Some scholars have argued that the lack of uniformity among state taxation of corporate income regimes engenders significant inefficiencies. See SHAVIRO, supra note 58, at 19; Kathryn L. Moore, State and Local Taxation of Interstate and Foreign Commerce: The Second Best Solution, 42 WAYNE L. REV. 1425, 1430 (1996). Undeniably, the costs of non-uniformity are much higher for corporations, which are likely to have business dealings in multiple states, than for individuals, most of whom live and work in the same state. Additionally, because corporations appear to be much more mobile than individuals, and better able to shift income from one jurisdiction to another, the grounds for exclusive federal tax jurisdiction over corporate income may be compelling. In any event, while the centralization of corporate tax jurisdiction in the federal government would nicely complement the devolution of the federal individual income tax, the merits of each proposal can and should be considered separately.
103. In order to make up some of the revenue, Congress might pass legislation, under its Commerce Clause authority, that prohibits states from taxing corporate incomes. Congress could then raise the federal corporate tax by an amount equal to the amount that the states would lose from the state taxes on corporations. Currently, the states raise four and one half times more revenue through taxing personal income than through taxes on corporate income. See HOLCOMBE & SOBEL, supra note 59, at 36; see also CAROLYN WEBBER & AARON WILDAVSKY, A HISTORY OF TAXATION AND EXPENDITURE IN THE WESTERN WORLD 552-55 (1986) (explaining why even progressive states are unlikely to rely heavily on taxing corporate income). Accordingly, unless the federal government was willing to operate with drastically reduced revenues, some requisitions would be necessary, even after such a swap of taxation bases. Some scholars have argued that the lack of uniformity among state taxation of corporate income regimes engenders significant inefficiencies. See SHAVIRO, supra note 58, at 19; Kathryn L. Moore, State and Local Taxation of Interstate and Foreign Commerce: The Second Best Solution, 42 WAYNE L. REV. 1425, 1430 (1996). Undeniably, the costs of non-uniformity are much higher for corporations, which are likely to have business dealings in multiple states, than for individuals, most of whom live and work in the same state. Additionally, because corporations appear to be much more mobile than individuals, and better able to shift income from one jurisdiction to another, the grounds for exclusive federal tax jurisdiction over corporate income may be compelling. In any event, while the centralization of corporate tax jurisdiction in the federal government would nicely complement the devolution of the federal individual income tax, the merits of each proposal can and should be considered separately.
104. In order to make up some of the revenue, Congress might pass legislation, under its Commerce Clause authority, that prohibits states from taxing corporate incomes. Congress could then raise the federal corporate tax by an amount equal to the amount that the states would lose from the state taxes on corporations. Currently, the states raise four and one half times more revenue through taxing personal income than through taxes on corporate income. See HOLCOMBE & SOBEL, supra note 59, at 36; see also CAROLYN WEBBER & AARON WILDAVSKY, A HISTORY OF TAXATION AND EXPENDITURE IN THE WESTERN WORLD 552-55 (1986) (explaining why even progressive states are unlikely to rely heavily on taxing corporate income). Accordingly, unless the federal government was willing to operate with drastically reduced revenues, some requisitions would be necessary, even after such a swap of taxation bases. Some scholars have argued that the lack of uniformity among state taxation of corporate income regimes engenders significant inefficiencies. See SHAVIRO, supra note 58, at 19; Kathryn L. Moore, State and Local Taxation of Interstate and Foreign Commerce: The Second Best Solution, 42 WAYNE L. REV. 1425, 1430 (1996). Undeniably, the costs of non-uniformity are much higher for corporations, which are likely to have business dealings in multiple states, than for individuals, most of whom live and work in the same state. Additionally, because corporations appear to be much more mobile than individuals, and better able to shift income from one jurisdiction to another, the grounds for exclusive federal tax jurisdiction over corporate income may be compelling. In any event, while the centralization of corporate tax jurisdiction in the federal government would nicely complement the devolution of the federal individual income tax, the merits of each proposal can and should be considered separately.
105. In order to make up some of the revenue, Congress might pass legislation, under its Commerce Clause authority, that prohibits states from taxing corporate incomes. Congress could then raise the federal corporate tax by an amount equal to the amount that the states would lose from the state taxes on corporations. Currently, the states raise four and one half times more revenue through taxing personal income than through taxes on corporate income. See HOLCOMBE & SOBEL, supra note 59, at 36; see also CAROLYN WEBBER & AARON WILDAVSKY, A HISTORY OF TAXATION AND EXPENDITURE IN THE WESTERN WORLD 552-55 (1986) (explaining why even progressive states are unlikely to rely heavily on taxing corporate income). Accordingly, unless the federal government was willing to operate with drastically reduced revenues, some requisitions would be necessary, even after such a swap of taxation bases. Some scholars have argued that the lack of uniformity among state taxation of corporate income regimes engenders significant inefficiencies. See SHAVIRO, supra note 58, at 19; Kathryn L. Moore, State and Local Taxation of Interstate and Foreign Commerce: The Second Best Solution, 42 WAYNE L. REV. 1425, 1430 (1996). Undeniably, the costs of non-uniformity are much higher for corporations, which are likely to have business dealings in multiple states, than for individuals, most of whom live and work in the same state. Additionally, because corporations appear to be much more mobile than individuals, and better able to shift income from one jurisdiction to another, the grounds for exclusive federal tax jurisdiction over corporate income may be compelling. In any event, while the centralization of corporate tax jurisdiction in the federal government would nicely complement the devolution of the federal individual income tax, the merits of each proposal can and should be considered separately.
106. See infra notes 354-359 and accompanying text (discussing the potential for animosity between rich and poor states' representatives on this issue).
107. For example, Congress could withhold grant payments to the states until the state was in compliance. However, depending on the amount of revenue that was budgeted for distribution to the states under a requisition arrangement, the amount of the requisition might well exceed the value of all grants. Under such circumstances, if a state did not make even a partial payment on its requisition obligation, such a tool would prove incomplete. Moreover, given the likely withering away of grant programs that would naturally follow from a shift to requisitions, grant reductions might not be a viable congressional option. At the same time, however, Congress would retain a number of coercive options. For example, Congress could refuse to seat a state's congressional delegation until that state paid its requisition, although such a move might provoke constitutional scrutiny. Congress could wreak havoc with the states by refusing their residents access to federally funded public goods, such as national parks, museums, the federal reserve system, Colorado River water, etc. Finally, Congress might authorize the federal government to seize state assets in the amount of the requisition due. While fun to imagine, this Article's strong presumption is that heavy-handed tactics of this sort never would be necessary.
108. Under one variation of a requisitions scheme, this power to institute a payroll tax might be subject to some limitations so as to prevent excessive tax exporting. See infra text accompanying notes 364-366 (discussing the possibility of judicially enforceable limits on tax exporting).
109. For an analysis of why such differentiation is a good thing, see infra Parts III. D, IV.A, IV.B, and IV.C.
110. I am not suggesting that congressional efforts to enforce uniform national policy, pursuant to Congress's powers under the Supremacy Clause, are illegitimate. Rather, I merely propose that state governments will have a more persuasive moral claim to state autonomy when they are spending funds that they have raised. Cf. Enid Beaumont, Status of the Devolution Revolution, PUB. MANAGER: NEW BUREAUCRAT, Dec. 1, 1996, at 23, available in 1996 WL 12015805, at *1 ("The more the federal government withdraws financial support [from the states], the less federal oversight there should be.").
111. The other typical justification for grants is to compensate for wealth disparities among the states. While redistributive policies of that sort are desirable, adjusting the requisition burden of each state will be just as effective in redistributing income from rich states to poor states as would
112. Under the status quo, we can conceptualize four levels of federal fiscal involvement in state-level activities. Ranked from the most to least federal involvement they are: (1) direct federal government programs; (2) block and category grants to state and local governments, with various "strings attached" to govern how the money can be spent; (3) revenue sharing, i.e., the direct transfer of funds collected by the federal government to state and local governments without strings attached; and (4) the federal government's decision not to tax a certain base of revenue so that the state and local governments can be left to decide whether to tax the base or leave it untaxed. For helpful overviews, see Bruce J. Casino, Federal Grants-in-Aid: Evolution, Crisis, and Future, 20 URB. LAW. 25 (1988); and Jerry L. Mashaw & Dylan S. Calsyn, Block Grants, Entitlements, and Federalism: A Conceptual Map of Contested Terrain, 14 YALE L. & POL'Y REV. 297, 302-03 (1996). One likely side effect of requisitions finance's rearrangement of federal-state relations on the taxation side of the ledger is to further the expenditure-side movement from categories (1) and (2) to category (4).
113. Under the status quo, we can conceptualize four levels of federal fiscal involvement in state-level activities. Ranked from the most to least federal involvement they are: (1) direct federal government programs; (2) block and category grants to state and local governments, with various "strings attached" to govern how the money can be spent; (3) revenue sharing, i.e., the direct transfer of funds collected by the federal government to state and local governments without strings attached; and (4) the federal government's decision not to tax a certain base of revenue so that the state and local governments can be left to decide whether to tax the base or leave it untaxed. For helpful overviews, see Bruce J. Casino, Federal Grants-in-Aid: Evolution, Crisis, and Future, 20 URB. LAW. 25 (1988); and Jerry L. Mashaw & Dylan S. Calsyn, Block Grants, Entitlements, and Federalism: A Conceptual Map of Contested Terrain, 14 YALE L. & POL'Y REV. 297, 302-03 (1996). One likely side effect of requisitions finance's rearrangement of federal-state relations on the taxation side of the ledger is to further the expenditure-side movement from categories (1) and (2) to category (4).
114. See Wallace E. Oates, Federalism and Government Finance, in MODERN PUBLIC FINANCE 135 (John M. Quigley & Eugene Smolensky eds., 1994) (describing the flypaper effect).
115. More precisely, the argument goes, members of Congress would raise taxes elsewhere in the budget to make up for the loss of individual income tax revenues. They would then take credit for federal spending on popular objectives, while forcing the state legislators to do the dirty work of raising revenues. This Article responds to that criticism infra text accompanying note 261.
116. See supra notes 64-69 and accompanying text (noting the disparities in personal income tax rates among various states).
117. Michael Walzer, The Communitarian Critique of Liberalism, in NEW COMMUNITARIAN THINKING 52, 58 (Amitai Etzioni ed., 1995).
118. LeBoeuf, supra note 20, at 580 (1994) (citing L.F. Dunn, Measuring the Value of Community, 6 J. URB. ECON. 371 (1979)).
119. LeBoeuf, supra note 20, at 580 (1994) (citing L.F. Dunn, Measuring the Value of Community, 6 J. URB. ECON. 371 (1979)).
120. See Wallace E. Oates, An Economist's Perspective on Fiscal Federalism, in THE POLITICAL ECONOMY OF FISCAL FEDERALISM 3, 9 (Wallace E. Oates ed., 1977).
121. See LARRY LONG, MIGRATION AND RESIDENTIAL MOBILITY IN THE UNITED STATES 187 (1988).
122. This jurisprudence was recently reaffirmed and extended by a seven-to-two majority in Saenz. v. Roe, 526 U.S. 489, 503-04 (1999) ("A citizen of the United States has a perfect constitutional right to go to and reside in any state he chooses, and to claim citizenship therein . . .").
123. SEE MIGRATION STATISTICS IN THE UNITED STATES: A REPORT OF THE SUBCOMMITTEE ON MIGRATION STATISTICS, COMMITTEE ON POPULATION STATISTICS, POPULATION ASSOCIATION OF AMERICA 20 (1988) (noting that 63% of all moves between 1975 and 1980 were within the same metropolitan area); PETER H. ROSSI, WHY FAMILIES MOVE 32 (3d ed. 1980) (citing a study estimating that the majority of moves are fewer than three miles).
124. SEE MIGRATION STATISTICS IN THE UNITED STATES: A REPORT OF THE SUBCOMMITTEE ON MIGRATION STATISTICS, COMMITTEE ON POPULATION STATISTICS, POPULATION ASSOCIATION OF AMERICA 20 (1988) (noting that 63% of all moves between 1975 and 1980 were within the same metropolitan area); PETER H. ROSSI, WHY FAMILIES MOVE 32 (3d ed. 1980) (citing a study estimating that the majority of moves are fewer than three miles).
125. See LONG, supra note 86, at 207.
126. Id. at 134.
127. See id. at 36.
128. See id. at 105.
129. See id. at 114; see also id. at 29 (noting that the 1980 census revealed that 64% of Americans still live in their state of birth).
130. See LONG, supra note 86, at 235 tbl.7.1 (noting that job transfers, looking for a new job, taking a new job, and entering or leaving the armed forces accounted for 22.2%, 6.3%, 18.7%, and 3.4% of all moves, respectively).
131. SEE GORDON L. CLARK, INTERREGIONAL MIGRATION, NATIONAL POLICY, AND SOCIAL JUSTICE 69 (1983).
132. See LONG, supra note 86, at 83 (identifying this factor as a considerable motivation for Northerners' migration to the South).
133. See id.; Oates, supra note 85, at 9.
134. See Bridges, supra note 70, at 218.
135. See GEORGE E. PETERSON & THOMAS MULLER, THE ECONOMIC AND FISCAL ACCOMPANIMENTS OF POPULATION CHANGE 76 (1980) (noting that older residents figure prominently among those who move to these states).
136. Kirk J. Stark, City Welfare: Views from Theory, History, and Practice, 27 URB. LAW. 495, 500-01 (1995) (citing these studies).
137. In practice, the federal income and payroll taxes are not geographically neutral. For example, the home mortgage interest deduction is of greater value to residents of high wage, high property-value states. See WILLIAM C. APGAR ET AL., HOUSING IN AMERICA: 1970-2000, THE NATION'S HOUSING NEEDS FORTHE BALANCE OF THE 20TH CENTURY 80-81 (1991). The payroll tax hits those living in high wage, high cost-of-living states disproportionately hard.
138. A 1988 GAO survey asked executives what the most important factors were for firm locational decisions. Ranked from most to least important, these factors were: market access, community characteristics, site characteristics, government cooperation, transportation, real estate costs, financial health of the region, quality of life, regulatory practices, miscellaneous taxes, labor force, financial inducements, and technical assistance. See HY & WAUGH, supra note 65, at 213 ex.8.2 (analyzing the criteria). Differing packages of taxes on individual income and government services may affect several of these factors, most notably community characteristics, government cooperation, real estate costs, financial health of the region, quality of life, miscellaneous taxes, and labor force; thereby playing a role in affecting firm location. The fact that financial inducements (corporate income tax rates and special one time targeted tax breaks) rank so low is surprising to many. As Hy & Waugh observe: A predominant fear of state and local officials is that their tax rate structures may be so out of line with those of other states and communities that businesses will flee to locations with the lowest tax rates or those offering the best tax incentives. For the most part, that fear is unfounded. Id. at 222. Other scholarship also concludes that taxes play a small role in firm decision-making about location, but that state governments presume that they play a very large role. See HENRY J. RAIMONDO, ECONOMICS OF STATE AND LOCAL GOVERNMENT 112 (1992). But cf. Bridges, supra note 70, at 214 n.34 ("It is alleged that personal income tax rate differentials for salary income discourage business firms from locating in high-income-tax states because of the difficulty of attracting executive talent to such states."); Kenyon, supra note 69, at 245 (arguing that both individuals and firms do take tax levels into account when choosing where to live).
139. A 1988 GAO survey asked executives what the most important factors were for firm locational decisions. Ranked from most to least important, these factors were: market access, community characteristics, site characteristics, government cooperation, transportation, real estate costs, financial health of the region, quality of life, regulatory practices, miscellaneous taxes, labor force, financial inducements, and technical assistance. See HY & WAUGH, supra note 65, at 213 ex.8.2 (analyzing the criteria). Differing packages of taxes on individual income and government services may affect several of these factors, most notably community characteristics, government cooperation, real estate costs, financial health of the region, quality of life, miscellaneous taxes, and labor force; thereby playing a role in affecting firm location. The fact that financial inducements (corporate income tax rates and special one time targeted tax breaks) rank so low is surprising to many. As Hy & Waugh observe: A predominant fear of state and local officials is that their tax rate structures may be so out of line with those of other states and communities that businesses will flee to locations with the lowest tax rates or those offering the best tax incentives. For the most part, that fear is unfounded. Id. at 222. Other scholarship also concludes that taxes play a small role in firm decision- making about location, but that state governments presume that they play a very large role. See HENRY J. RAIMONDO, ECONOMICS OF STATE AND LOCAL GOVERNMENT 112 (1992). But cf. Bridges, supra note 70, at 214 n.34 ("It is alleged that personal income tax rate differentials for salary income discourage business firms from locating in high-income-tax states because of the difficulty of attracting executive talent to such states."); Kenyon, supra note 69, at 245 (arguing that both individuals and firms do take tax levels into account when choosing where to live).
140. A 1988 GAO survey asked executives what the most important factors were for firm locational decisions. Ranked from most to least important, these factors were: market access, community characteristics, site characteristics, government cooperation, transportation, real estate costs, financial health of the region, quality of life, regulatory practices, miscellaneous taxes, labor force, financial inducements, and technical assistance. See HY & WAUGH, supra note 65, at 213 ex.8.2 (analyzing the criteria). Differing packages of taxes on individual income and government services may affect several of these factors, most notably community characteristics, government cooperation, real estate costs, financial health of the region, quality of life, miscellaneous taxes, and labor force; thereby playing a role in affecting firm location. The fact that financial inducements (corporate income tax rates and special one time targeted tax breaks) rank so low is surprising to many. As Hy & Waugh observe: A predominant fear of state and local officials is that their tax rate structures may be so out of line with those of other states and communities that businesses will flee to locations with the lowest tax rates or those offering the best tax incentives. For the most part, that fear is unfounded. Id. at 222. Other scholarship also concludes that taxes play a small role in firm decision- making about location, but that state governments presume that they play a very large role. See HENRY J. RAIMONDO, ECONOMICS OF STATE AND LOCAL GOVERNMENT 112 (1992). But cf. Bridges, supra note 70, at 214 n.34 ("It is alleged that personal income tax rate differentials for salary income discourage business firms from locating in high-income-tax states because of the difficulty of attracting executive talent to such states."); Kenyon, supra note 69, at 245 (arguing that both individuals and firms do take tax levels into account when choosing where to live).
141. A 1988 GAO survey asked executives what the most important factors were for firm locational decisions. Ranked from most to least important, these factors were: market access, community characteristics, site characteristics, government cooperation, transportation, real estate costs, financial health of the region, quality of life, regulatory practices, miscellaneous taxes, labor force, financial inducements, and technical assistance. See HY & WAUGH, supra note 65, at 213 ex.8.2 (analyzing the criteria). Differing packages of taxes on individual income and government services may affect several of these factors, most notably community characteristics, government cooperation, real estate costs, financial health of the region, quality of life, miscellaneous taxes, and labor force; thereby playing a role in affecting firm location. The fact that financial inducements (corporate income tax rates and special one time targeted tax breaks) rank so low is surprising to many. As Hy & Waugh observe: A predominant fear of state and local officials is that their tax rate structures may be so out of line with those of other states and communities that businesses will flee to locations with the lowest tax rates or those offering the best tax incentives. For the most part, that fear is unfounded. Id. at 222. Other scholarship also concludes that taxes play a small role in firm decision- making about location, but that state governments presume that they play a very large role. See HENRY J. RAIMONDO, ECONOMICS OF STATE AND LOCAL GOVERNMENT 112 (1992). But cf. Bridges, supra note 70, at 214 n.34 ("It is alleged that personal income tax rate differentials for salary income discourage business firms from locating in high-income-tax states because of the difficulty of attracting executive talent to such states."); Kenyon, supra note 69, at 245 (arguing that both individuals and firms do take tax levels into account when choosing where to live).
142. See generally infra notes 162-166 and accompanying text (discussing the Tiebout hypothesis).
143. That outcome should not be immediately apparent. Arguably, the fact that each state would have to raise at least enough revenue to meet its federal quota seems to indicate that poorer states would converge upward toward this newly raised floor. But two related dynamics illustrate why this will not be the case. First, the amount of each state's quota presumably would be set so that poorer states faced a much lower per capita requisition burden than richer states. See infra text accompanying note 359 (noting that the tax system's progressivity can be maintained through quota adjustments). The floor required to meet the requisition burden thus would not be uniform among the states, but would vary dramatically to reflect the differing economic circumstances in each state. Second, in comparing the current individual income tax to requisitions finance, it is important to assume that the two systems would, at least initially, draw the same amount of tax dollars from each state. For example, under the status quo, the average Alabama resident would pay $5,000 in state taxes and $10,000 in federal income taxes. Under requisitions finance, the average Alabama resident would pay $15,000 in state taxes, $10,000 of which would go to the federal government (assuming no immediate reduction in grants-in-aid). This stipulation, which is necessary to fairly compare the two revenueraising schemes, makes it clear that the aggregate level of state taxation will not immediately differ in a way that would affect the overall amount of taxation in a given state or produce any convergence toward a minimum level of taxation. What would happen is that differences among the states over who they taxed to raise their revenues would become more pronounced, because the entire $15,000 of liability, as opposed to the $5,000 that the state formerly controlled, would be influenced by the different tax distributional schemes within each state.
144. Though one might expect to see the greatest mobility in the years immediately following the enactment of a requisitions scheme, one should anticipate that adopting such a scheme would bring about much more than a one-time reshuffling of the population. People's preferences change over time. As those preferences change, citizens may find that migration to another state becomes increasingly attractive. Similarly, the newer members of society, while likely feeling some attachment to their parents' home states, will in many instances want to migrate elsewhere once they reach adulthood.
145. Although it is not central to this Article, I would submit that even if an individual does not exercise her right to move to another state, the fact that requisitions finance gives her a more meaningful right to move to a community that has a different character than the one in which she currently lives is normatively attractive. The intuition underlying the Supreme Court's right-to-travel jurisprudence is founded upon the idea that being able to move to another state is a fundamental right that is important to preserving individual autonomy in much the same way as rights to free speech and free exercise of religion. By making the current distinctions between states more substantial, requisitions finance would strengthen the right to travel in a manner no less significant than the Saenz rule, which removed barriers to travel between slightly differentiated states. See Saenz v. Roe, 526 U.S. 489 (1999) (holding that states' durational residency requirements for welfare benefits violate the fundamental right to travel). Indeed, I would posit that it is not the right to travel long geographic distances that makes the constitutional "right to travel" compelling, but the right to travel to an area that is economically, socially, ecologically, climatically, or culturally different from the community in which one resides: Whether the traveler's destination lies three or three thousand miles away is immaterial.
146. See infra note 118 and sources cited therein (discussing the community-defining possibilities of tax-burden allocation).
147. See JOHN D. DONOHUE, DISUNITED STATES 13 (1997) (citing studies showing much higher levels of citizen trust in state than federal governments); Mashaw & Calsyn, supra note 79, at 311 (commenting that polling data suggests that people have higher confidence in state governments); NATIONAL CONFERENCE OF STATE LEGISLATURES, STATE LEGISLATURES: TAKING ON AMERICA'S ISSUES (1998), available in 1998 WL 12872097 (citing its own study reporting similar results). Admittedly, the data collected in this latter source should be interpreted with caution. One suspects that the National Conference might create a questionnaire that presents their constituent legislatures in a favorable light.
148. See JOHN D. DONOHUE, DISUNITED STATES 13 (1997) (citing studies showing much higher levels of citizen trust in state than federal governments); Mashaw & Calsyn, supra note 79, at 311 (commenting that polling data suggests that people have higher confidence in state governments); NATIONAL CONFERENCE OF STATE LEGISLATURES, STATE LEGISLATURES: TAKING ON AMERICA'S ISSUES (1998), available in 1998 WL 12872097 (citing its own study reporting similar results). Admittedly, the data collected in this latter source should be interpreted with caution. One suspects that the National Conference might create a questionnaire that presents their constituent legislatures in a favorable light.
149. See JOHN D. DONOHUE, DISUNITED STATES 13 (1997) (citing studies showing much higher levels of citizen trust in state than federal governments); Mashaw & Calsyn, supra note 79, at 311 (commenting that polling data suggests that people have higher confidence in state governments); NATIONAL CONFERENCE OF STATE LEGISLATURES, STATE LEGISLATURES: TAKING ON AMERICA'S ISSUES (1998), available in 1998 WL 12872097 (citing its own study reporting similar results). Admittedly, the data collected in this latter source should be interpreted with caution. One suspects that the National Conference might create a questionnaire that presents their constituent legislatures in a favorable light.
150. See 〈www.cnn.com/Election/1998/results/governor.html〉 (visited Jan. 21, 1999) (showing that, in 1998, thirteen governors were elected with 60% or more of the vote, led by Kansas's governor, who won 74% of his state's vote).
151. See sources cited supra note 108.
152. See John Marelius, 6 Million May Vote in Open Primary, SAN DIEGO UNION & TRIB., June 2, 1998, at Al (noting "a steady trend toward declining participation in state primaries"); John Marelius, Voters Wait and See on Most Races, SAN DIEGO UNION & TRIB., Aug. 31, 1998, at A3 (noting a lack of interest in and awareness of candidates for statewide office).
153. See John Marelius, 6 Million May Vote in Open Primary, SAN DIEGO UNION & TRIB., June 2, 1998, at Al (noting "a steady trend toward declining participation in state primaries"); John Marelius, Voters Wait and See on Most Races, SAN DIEGO UNION & TRIB., Aug. 31, 1998, at A3 (noting a lack of interest in and awareness of candidates for statewide office).
154. See Mashaw & Calsyn, supra note 79, at 310.
155. See Susan B. Hansen, Disunited States: What's at Stake as Washington Fades and the States Take the Lead, 113 POL. SCI. Q. 527, 527 (1998) (reviewing DONOHUE, supra note 108); Joe Nicholson, Are Newspapers Abandoning Their Statehouse Coverage?, EDITOR & PUBLISHER, Sept. 12, 1998, at 16 (noting the dwindling numbers of reporters assigned to cover state governments); cf. RICHARD C. Box, CITIZEN GOVERNANCE: LEADING AMERICAN COMMUNITIES INTO THE 21ST CENTURY 41 (1998) (arguing that local governments get very little media coverage). It is likely that requisitions finance, by increasing the pocket-book importance of state governmental activities, would prompt the media to increase coverage of state-level political activities. Cf. DONOHUE, supra note 108, at 46 (suggesting that the media focuses on issues for which viewers' pocket-books are likely to be effected significantly).
156. See Susan B. Hansen, Disunited States: What's at Stake as Washington Fades and the States Take the Lead, 113 POL. SCI. Q. 527, 527 (1998) (reviewing DONOHUE, supra note 108); Joe Nicholson, Are Newspapers Abandoning Their Statehouse Coverage?, EDITOR & PUBLISHER, Sept. 12, 1998, at 16 (noting the dwindling numbers of reporters assigned to cover state governments); cf. RICHARD C. Box, CITIZEN GOVERNANCE: LEADING AMERICAN COMMUNITIES INTO THE 21ST CENTURY 41 (1998) (arguing that local governments get very little media coverage). It is likely that requisitions finance, by increasing the pocket-book importance of state governmental activities, would prompt the media to increase coverage of state-level political activities. Cf. DONOHUE, supra note 108, at 46 (suggesting that the media focuses on issues for which viewers' pocket-books are likely to be effected significantly).
157. See Susan B. Hansen, Disunited States: What's at Stake as Washington Fades and the States Take the Lead, 113 POL. SCI. Q. 527, 527 (1998) (reviewing DONOHUE, supra note 108); Joe Nicholson, Are Newspapers Abandoning Their Statehouse Coverage?, EDITOR & PUBLISHER, Sept. 12, 1998, at 16 (noting the dwindling numbers of reporters assigned to cover state governments); cf. RICHARD C. Box, CITIZEN GOVERNANCE: LEADING AMERICAN COMMUNITIES INTO THE 21ST CENTURY 41 (1998) (arguing that local governments get very little media coverage). It is likely that requisitions finance, by increasing the pocket-book importance of state governmental activities, would prompt the media to increase coverage of state-level political activities. Cf. DONOHUE, supra note 108, at 46 (suggesting that the media focuses on issues for which viewers' pocket-books are likely to be effected significantly).
158. See Susan B. Hansen, Disunited States: What's at Stake as Washington Fades and the States Take the Lead, 113 POL. SCI. Q. 527, 527 (1998) (reviewing DONOHUE, supra note 108); Joe Nicholson, Are Newspapers Abandoning Their Statehouse Coverage?, EDITOR & PUBLISHER, Sept. 12, 1998, at 16 (noting the dwindling numbers of reporters assigned to cover state governments); cf. RICHARD C. Box, CITIZEN GOVERNANCE: LEADING AMERICAN COMMUNITIES INTO THE 21ST CENTURY 41 (1998) (arguing that local governments get very little media coverage). It is likely that requisitions finance, by increasing the pocket-book importance of state governmental activities, would prompt the media to increase coverage of state-level political activities. Cf. DONOHUE, supra note 108, at 46 (suggesting that the media focuses on issues for which viewers' pocket-books are likely to be effected significantly).
159. See Susan B. Hansen, Disunited States: What's at Stake as Washington Fades and the States Take the Lead, 113 POL. SCI. Q. 527, 527 (1998) (reviewing DONOHUE, supra note 108); Joe Nicholson, Are Newspapers Abandoning Their Statehouse Coverage?, EDITOR & PUBLISHER, Sept. 12, 1998, at 16 (noting the dwindling numbers of reporters assigned to cover state governments); cf. RICHARD C. Box, CITIZEN GOVERNANCE: LEADING AMERICAN COMMUNITIES INTO THE 21ST CENTURY 41 (1998) (arguing that local governments get very little media coverage). It is likely that requisitions finance, by increasing the pocket-book importance of state governmental activities, would prompt the media to increase coverage of state-level political activities. Cf. DONOHUE, supra note 108, at 46 (suggesting that the media focuses on issues for which viewers' pocket-books are likely to be effected significantly).
160. See Scott Broom, Media Relations Tips To Get Your Segment on the Ten O'clock News, PR NEWS, Nov. 30, 1998, available in 1998 WL 7331277 (noting that providing a local angle on a news story will increase its odds of getting on the air). For an example that the Iowa Law Review's statewide readership will appreciate, see Rob Borsellino, Finding the 'Iowa Connection' to Judge Kenneth Starr, DES MOINES REG., Feb. 21, 1998, at 1 ("In the never ending effort to find a 'local angle' for every possible story - no matter how thin the connection - I've dug up Kevin Saunders, Drake law professor, legal scholar and former clerk for one-time federal Judge Kenneth Starr."). Of course, in large states like California and New York, a local angle may differ dramatically from a statewide angle.
161. See Scott Broom, Media Relations Tips To Get Your Segment on the Ten O'clock News, PR NEWS, Nov. 30, 1998, available in 1998 WL 7331277 (noting that providing a local angle on a news story will increase its odds of getting on the air). For an example that the Iowa Law Review's statewide readership will appreciate, see Rob Borsellino, Finding the 'Iowa Connection' to Judge Kenneth Starr, DES MOINES REG., Feb. 21, 1998, at 1 ("In the never ending effort to find a 'local angle' for every possible story - no matter how thin the connection - I've dug up Kevin Saunders, Drake law professor, legal scholar and former clerk for one-time federal Judge Kenneth Starr."). Of course, in large states like California and New York, a local angle may differ dramatically from a statewide angle.
162. Cf. Edward L. Rubin & Malcolm Feely, Federalism: Some Notes on a National Neurosis, 41 UCLA L. REV. 903, 944 (1994) ("Most of our states, the alleged political communities that federalism would preserve, are mere administrative units; rectangular swatches of the prairie with nothing but their legal definitions to distinguish them from one another."); Charles Taylor, Hegel: History and Politics, in LIBERALISM AND ITS DISCONTENTS 177, 195 (Michael J. Sandel ed., 1992) ("There is no advantage in an artificial carving up of society into manageable units. If in fact no one identifies strongly with these units, participation will be minimal, as we see in much of our urban politics today.").
163. Cf. Edward L. Rubin & Malcolm Feely, Federalism: Some Notes on a National Neurosis, 41 UCLA L. REV. 903, 944 (1994) ("Most of our states, the alleged political communities that federalism would preserve, are mere administrative units; rectangular swatches of the prairie with nothing but their legal definitions to distinguish them from one another."); Charles Taylor, Hegel: History and Politics, in LIBERALISM AND ITS DISCONTENTS 177, 195 (Michael J. Sandel ed., 1992) ("There is no advantage in an artificial carving up of society into manageable units. If in fact no one identifies strongly with these units, participation will be minimal, as we see in much of our urban politics today.").
164. See infra notes 171-176 and accompanying text (noting that residents within a state already have much in common, but arguing that a requisitions finance system would allow residents to further define their communities based on shared preferences and ideologies).
165. By now, communitarianism has made such heavy inroads into the legal academy that this Article's readers should be familiar with the concept. At the same time, as Philip Selznick has observed, "the communitarian idea is vague; in contemporary writing it is more often alluded to and hinted at then explicated." Philp Selznick, The Idea of a Communitarian Morality, 75 CAL. L. REV. 445, 445 (1987). Lest this Article continue that trend of definition dodging, I will say the following: Communitarianism is characterized by a belief that when individuals come together with their neighbors to make decisions or socialize, they derive extremely valuable benefits that they cannot achieve as isolated individuals. Communitarianism, in that sense, draws heavily from civic republican ideals. As such, communitarians are likely to embrace institutional arrangements that successfully bring people into public spaces, where they can interact with their peers. Communitarians are also likely to recognize that the bonds between members of a community will be greatest when the community's population is not so large as to eviscerate opportunities for members to interact repeatedly with each other. Communitarians tend to recognize and embrace the commonalties within communities and the differences among communities. Finally, communitarians are likely to favor decision-making paradigms that value the community's interests over the individual's self-interest. For further elaboration, see AMITAI ETZIONI, THE SPIRIT OF COMMUNITY: RIGHTS, RESPONSIBILITIES, AND THE COMMUNITARIAN APPROACH (1993), and the sources cited infra notes 118, 135, and 164.
166. By now, communitarianism has made such heavy inroads into the legal academy that this Article's readers should be familiar with the concept. At the same time, as Philip Selznick has observed, "the communitarian idea is vague; in contemporary writing it is more often alluded to and hinted at then explicated." Philp Selznick, The Idea of a Communitarian Morality, 75 CAL. L. REV. 445, 445 (1987). Lest this Article continue that trend of definition dodging, I will say the following: Communitarianism is characterized by a belief that when individuals come together with their neighbors to make decisions or socialize, they derive extremely valuable benefits that they cannot achieve as isolated individuals. Communitarianism, in that sense, draws heavily from civic republican ideals. As such, communitarians are likely to embrace institutional arrangements that successfully bring people into public spaces, where they can interact with their peers. Communitarians are also likely to recognize that the bonds between members of a community will be greatest when the community's population is not so large as to eviscerate opportunities for members to interact repeatedly with each other. Communitarians tend to recognize and embrace the commonalties within communities and the differences among communities. Finally, communitarians are likely to favor decision-making paradigms that value the community's interests over the individual's self-interest. For further elaboration, see AMITAI ETZIONI, THE SPIRIT OF COMMUNITY: RIGHTS, RESPONSIBILITIES, AND THE COMMUNITARIAN APPROACH (1993), and the sources cited infra notes 118, 135, and 164.
167. See, e.g., MICHAEL J. SANDEL, DEMOCRACY'S DISCONTENT: AMERICAN IN SEARCH OF A PUBLIC PHILOSOPHY 280-84 (1996); ROBERTO MANGABEIRA UNGER, WHAT SHOULD LEGAL ANALYSIS BECOME? 96, 97 (1996); MICHAEL WALZER, SPHERES OF JUSTICE 119-23 (1983).
168. See, e.g., MICHAEL J. SANDEL, DEMOCRACY'S DISCONTENT: AMERICAN IN SEARCH OF A PUBLIC PHILOSOPHY 280-84 (1996); ROBERTO MANGABEIRA UNGER, WHAT SHOULD LEGAL ANALYSIS BECOME? 96, 97 (1996); MICHAEL WALZER, SPHERES OF JUSTICE 119-23 (1983).
169. See, e.g., MICHAEL J. SANDEL, DEMOCRACY'S DISCONTENT: AMERICAN IN SEARCH OF A PUBLIC PHILOSOPHY 280-84 (1996); ROBERTO MANGABEIRA UNGER, WHAT SHOULD LEGAL ANALYSIS BECOME? 96, 97 (1996); MICHAEL WALZER, SPHERES OF JUSTICE 119-23 (1983).
170. Russell Long's oft-quoted statement, "Don't tax you, don't tax me: Tax that fellow behind the tree," is illustrative. See John A. Miller, Rationalizing Injustice: The Supreme Court and the Property Tax, 22 HOFSTRAL. REV. 79, 79 (1993) (quoting Long).
171. For a discussion of the Clinton Administration's reluctance to appear as if it is increasing the tax burden on middle-class taxpayers, see generally Michael J. Graetz, Paint-by-Numbers Tax Lawmaking, 95 COLUM. L. REV. 609 (1995).
172. For example, President Clinton's recent efforts to increase revenues have targeted the insurance industry, the tobacco industry, and other corporations. See Elizabeth D. Festa, Industry Girds for Long Battle To Save VAs, INS. ACCT., Feb. 16, 1998, at 1 (describing the impact on the insurance industry); Alan Fram, Facing Elections, Republicans Wrestle over Tax Cut Strategy, AP POL. SERV., Feb. 25, 1998, available in 1998 WL 7390233 (describing broader impacts of Clinton's tax policy on the corporate community).
173. For example, President Clinton's recent efforts to increase revenues have targeted the insurance industry, the tobacco industry, and other corporations. See Elizabeth D. Festa, Industry Girds for Long Battle To Save VAs, INS. ACCT., Feb. 16, 1998, at 1 (describing the impact on the insurance industry); Alan Fram, Facing Elections, Republicans Wrestle over Tax Cut Strategy, AP POL. SERV., Feb. 25, 1998, available in 1998 WL 7390233 (describing broader impacts of Clinton's tax policy on the corporate community).
174. In 1992, then-Chairman of the House Ways and Means Committee, Dan Rostenkowski, reformulated Russell Long's statement to read: "Don't tax you. Don't tax me. Tax the companies across the sea." MICHAEL J. GRAETZ, THE DECLINE (AND FALL?) OF THE INCOME TAX 6 (1997).
175. This is an important caveat. For many taxes, such as the tax on corporate income and the employer portion of the payroll tax, the middle class bears the primary burden but its members do not realize it because that tax is initially paid by another entity and then partially passed along to middle class consumers or employees through higher prices or lower wages.
176. The potential for shifting the tax burden to out-of-state residents is an important qualification to this blanket statement. See infra Part IV. F (discussing the tax export problem).
177. See OATES, supra note 70, at 13 ("If a community is required to finance its own public program through local taxation, residents are more likely to weigh the benefits of the program against its actual costs.").
178. See supra text accompanying note 2.
179. To be sure, if the federal estate tax is made applicable to more farms, then the same constituents may well descend upon their representative to make their case for or against the change. However, the chief difference will be that legislators will feel much more comfortable assessing the impact of the policy change on unseen voters in a smaller community than in a large one. In the toll bridge example, the legislature may be able to reason in the following manner: "There are forty-five toll bridges in this state. Sixteen are in Jefferson County. Nineteen are in Williams County. The remainder are scattered. That means the economies of Jefferson and Williams County will be adversely affected." Meanwhile, the national picture, encompassing thousands of toll bridges, would defy simple comprehension. Congressional staff could supply a breakdown of how many bridges are rural and how many are urban, thus indicating the type of people who would be affected. Such statistics will be less informative, however, than information that can be drawn from the legislator's inherent knowledge about the communities and people who would be affected by the policy change.
180. See LeBoeuf, supra note 20, at 564-65 ("[A]s the ratio of citizens to representatives falls, the citizens become more aware of the activities of their elected officials.").
181. See supra note 108 (citing sources discussing citizen distrust of the federal government).
182. While the trend over the last few decades has been toward the professionalization of state legislatures, see TIMOTHY CONLAN, FROM NEW FEDERALISM TO DEVOLUTION: TWENTY-FIVE YEARS OF INTERGOVERNMENTAL REFORM 310 (1998), state legislators' salaries are still quite low. See Andrew Blum, Losing Its Allure: Lawyer/Legislators Are a Dying Breed. It Just Doesn't Pay, NAT'L L.J., Sept. 7, 1992, at 1, 34 (criticizing low legislative salaries as a disincentive to service).
183. While the trend over the last few decades has been toward the professionalization of state legislatures, see TIMOTHY CONLAN, FROM NEW FEDERALISM TO DEVOLUTION: TWENTY- FIVE YEARS OF INTERGOVERNMENTAL REFORM 310 (1998), state legislators' salaries are still quite low. See Andrew Blum, Losing Its Allure: Lawyer/Legislators Are a Dying Breed. It Just Doesn't Pay, NAT'L L.J., Sept. 7, 1992, at 1, 34 (criticizing low legislative salaries as a disincentive to service).
184. Admittedly, legislators prefer spending over taxing. Thus, if requisitions remained large, and the federal government continued to spend the bulk of the nation's public-sector dollars, devolution of the individual income tax might have little effect on legislators seeking to climb the social ladder. However, recall that the flypaper effect implies that tax revenue tends to stick where it is collected. See text accompanying supra note 80. Thus, devolution of the individual income tax may eventually result in the state governments spending an increased percentage of government dollars. Among the many consequences of such a shift would be an increase in the number of ambitious civil servants remaining in state government.
185. Mashaw & Calsyn, supra note 79, at 310-11.
186. See ALEXIS DE TOCQUEVILLE, 1 DEMOCRACY IN AMERICA 251 (Phillips Bradley ed., Vintage Books 1990) (1835) ("[I]t is impossible that the lower orders should take a part in public business without extending the circle of their ideas and quitting the ordinary routine of their thoughts. The humblest individual who co-operates in the government of society acquires a certain degree of self-respect. . . .").
187. Thomas A. Spragens, Jr., Communitarian Liberalism, in NEW COMMUNITARIAN THINKING, supra note 83, at 37, 50.
188. See generally HANNAH ARENDT, THE HUMAN CONDITION 175-247 (1958) (recognizing the importance of speech and action).
189. Hannah Arendt writes: In acting and speaking, men show who they are, reveal actively their unique personal identities and thus make their appearance in the human world, while their physical identities appear without any activity of their own in the unique shape of the body and sound of the voice. . . . Because of its inherent tendency to disclose the agent together with the act, action needs for its full appearance the shining brightness we once called glory, and which is possible only in the public realm. Id. at 179-80.
190. For sources discussing this proposition, see BENJAMIN R. BARBER, STRONG DEMOCRACY 152 (1984) and Hannah Pitkin, Justice: On Relating Private and Public, 9 POL. THEORY 327, 349 (1981).
191. For sources discussing this proposition, see BENJAMIN R. BARBER, STRONG DEMOCRACY 152 (1984) and Hannah Pitkin, Justice: On Relating Private and Public, 9 POL. THEORY 327, 349 (1981).
192. See BRETON, supra note 70, at 83 ("If the desire is for new, smaller political units, citizens are more able to supervise and control what is supplied to them than in larger units."); LeBoeuf, supra note 20, at 565 (noting that decentralization is conducive to greater accountability due to both geographical and numerical considerations).
193. See BRETON, supra note 70, at 83 ("If the desire is for new, smaller political units, citizens are more able to supervise and control what is supplied to them than in larger units."); LeBoeuf, supra note 20, at 565 (noting that decentralization is conducive to greater accountability due to both geographical and numerical considerations).
194. Cf. Stuart Langton, Citizen Participation in America: Current Reflections on the State of the Art, in CITIZEN PARTICIPATION IN AMERICA: CURRENT REFLECTIONS ON THE STATE OF THE ART 1, 5 (Stuart Langton ed., 1978) [hereinafter CITIZEN PARTICIPATION IN AMERICA] (discussing state governments' efforts to coordinate and increase the efficacy of citizen involvement in decision-making).
195. See Evan H. Caminker, State Sovereignty and Subordinancy: May Congress Commandeer State Officers To Implement Federal Law?, 95 COLUM. L. REV. 1001, 1077-78 (1995) (explaining how state and local government fosters greater citizen involvement); Gerald E. Frug, The City as a Legal Concept, 93 HARV. L. REV. 1057, 1068 (1980) (detailing the benefits of shifting more political power to localities, whose governments are generally more accessible).
196. See Evan H. Caminker, State Sovereignty and Subordinancy: May Congress Commandeer State Officers To Implement Federal Law?, 95 COLUM. L. REV. 1001, 1077-78 (1995) (explaining how state and local government fosters greater citizen involvement); Gerald E. Frug, The City as a Legal Concept, 93 HARV. L. REV. 1057, 1068 (1980) (detailing the benefits of shifting more political power to localities, whose governments are generally more accessible).
197. See Nelson M. Rosenbaum, Citizen Participation and Democratic Theory, in CITIZEN PARTICIPATION IN AMERICA, supra note 139, at 43, 49 ("[P]articipation per se demonstrates little association with trust and support. Rather, it is substantive satisfaction with a decision that leads to faith in the political system.").
198. As Rosenbaum puts it: [R]ather than increasing the sense of political obligation and support for government, as proponents suggest, participation often results in ever greater instability and discontent. Many critics focus upon the danger of overloading the political system with irresponsible demands for services and subsidies that government cannot realistically provide. The inflation of expectations precipitated by citizen participation creates increased dissatisfaction and unrest when needs are not met. Id.
199. Cf. Spragens, supra note 134, at 37 ("Communitarians will be inclined to believe that a society which makes juridicial combat its paradigmatic form of political interaction will be unnecessarily acrimonious and divided. They will therefore want to promote political modes of mediation, reconciliation, and compromise that seek creative syntheses from different interests and divergent moral concerns.").
200. See GEORGE F. BREAK, FINANCING GOVERNMENT IN A FEDERAL SYSTEM 14 (1980); BRETON, supra note 70, at 41, 116; OATES, supra note 70, at 11; cf. Craig Volden, Entrusting the States with Welfare Reform, in THE NEW FEDERALISM: CAN THE STATES BE TRUSTED? 66, 83 (John A. Ferejohn & Barry K. Weingart eds., 1997) [hereinafter THE NEW FEDERALISM] (noting that political circumstances vary dramatically from one state to the next).
201. See GEORGE F. BREAK, FINANCING GOVERNMENT IN A FEDERAL SYSTEM 14 (1980); BRETON, supra note 70, at 41, 116; OATES, supra note 70, at 11; cf. Craig Volden, Entrusting the States with Welfare Reform, in THE NEW FEDERALISM: CAN THE STATES BE TRUSTED? 66, 83 (John A. Ferejohn & Barry K. Weingart eds., 1997) [hereinafter THE NEW FEDERALISM] (noting that political circumstances vary dramatically from one state to the next).
202. See GEORGE F. BREAK, FINANCING GOVERNMENT IN A FEDERAL SYSTEM 14 (1980); BRETON, supra note 70, at 41, 116; OATES, supra note 70, at 11; cf. Craig Volden, Entrusting the States with Welfare Reform, in THE NEW FEDERALISM: CAN THE STATES BE TRUSTED? 66, 83 (John A. Ferejohn & Barry K. Weingart eds., 1997) [hereinafter THE NEW FEDERALISM] (noting that political circumstances vary dramatically from one state to the next).
203. See GEORGE F. BREAK, FINANCING GOVERNMENT IN A FEDERAL SYSTEM 14 (1980); BRETON, supra note 70, at 41, 116; OATES, supra note 70, at 11; cf. Craig Volden, Entrusting the States with Welfare Reform, in THE NEW FEDERALISM: CAN THE STATES BE TRUSTED? 66, 83 (John A. Ferejohn & Barry K. Weingart eds., 1997) [hereinafter THE NEW FEDERALISM] (noting that political circumstances vary dramatically from one state to the next).
204. See David E. Wildasin, Income Redistribution in a Common Labor Market, 81 AM. ECON. REV. 757 (1991) (discussing the dramatically differing levels of AFDC benefits among states).
205. See Reschovsky, supra note 70, at 166 (surveying the attitudes of states toward taxation). In 1997, New Hampshire's high court ordered it to equalize funding to public school districts, and it was widely perceived that the decision would force New Hampshire's legislature to enact a personal income tax. But after a prolonged debate, the legislature worked out a plan that raised $825 million for school funding equalization without imposing an income tax. See N.H. Resolves School Crisis Without Imposing Income Tax, BALT. SUN, Apr. 30, 1999, at 14A.
206. See Reschovsky, supra note 70, at 166 (surveying the attitudes of states toward taxation). In 1997, New Hampshire's high court ordered it to equalize funding to public school districts, and it was widely perceived that the decision would force New Hampshire's legislature to enact a personal income tax. But after a prolonged debate, the legislature worked out a plan that raised $825 million for school funding equalization without imposing an income tax. See N.H. Resolves School Crisis Without Imposing Income Tax, BALT. SUN, Apr. 30, 1999, at 14A.
207. A theoretically important caveat is in order. The above analysis skirts utilitarian questions of interpersonal utility comparisons by framing a binary question: "Did you prevail in getting the kind of tax code for which you were lobbying or not?" Such a binary choice allows for simple head-counting as a measure of welfare aggregation. However, it is conceivable that those who are more likely to lose if the most significant tax policy decisions are made at the state level will feel more resentful about the loss, or be more discouraged, than those who are "losers" under the current arrangement. In such an instance, the analysis in text would not hold. However, because of the seemingly insurmountable problems that arise from efforts to make interpersonal utility or intensity of preference comparisons, this possibility will be set aside.
208. See GRAETZ, supra note 122, at 91.
209. See Julie Esther Keller, Comment, Access Deferred Is Access Denied, 15 WM. MTCHELL L. REV. 739, 740 (1989) (referring to public outrage over the $532.74 hammers, $350 screws, and $700 toilet seat covers).
210. See George F. Will, Lawrence Welk and Line Items, WASH. POST, Feb. 23, 1992, at C7 (characterizing the Welk Museum as classic pork-barrel spending).
211. See Robert Jerome Glennon, Federalism as a Regional Issue: "Get Out! And Give Us More Money," 38 ARIZ. L. REV. 829, 841 (1996) ("While the Department of Agriculture provided crop subsidies and payments to farmers not to grow certain crops, the Bureau of Reclamation built dams to allow these crops to be grown in areas of the country not naturally suited to their production.").
212. See Pete V. Domenici, Fighting the Good Fight: Washington's Quest for a Balanced Budget, 16 ST. LOUIS, U. PUB. L. REV. 17, 20 (1996); see also John W. Ellwood & Eric M. Patashnik, In Praise of Pork, 110 PUB. INTEREST 19, 21 (1993) (arguing that discretionary spending is superior to entitlement spending because it allows legislators to provide interest groups with favors at a relatively low (one-time) cost).
213. See Pete V. Domenici, Fighting the Good Fight: Washington's Quest for a Balanced Budget, 16 ST. LOUIS, U. PUB. L. REV. 17, 20 (1996); see also John W. Ellwood & Eric M. Patashnik, In Praise of Pork, 110 PUB. INTEREST 19, 21 (1993) (arguing that discretionary spending is superior to entitlement spending because it allows legislators to provide interest groups with favors at a relatively low (one-time) cost).
214. See Graeme S. Cooper, Analyzing Corporate Tax Evasion, 50 TAX L. REV. 33, 65 (1994) (discussing empirical studies showing "that favorable attitudes to taxpaying, which are believed to be manifest in actual behavior, apparently are associated with the belief that others are paying their share and that the system as a whole is fair," and correlate with higher levels of taxpayer compliance); see also GRAETZ, supra note 122, at 91, 106 (linking increasing tolerance for tax evasion to perceived waste in government spending).
215. See Graeme S. Cooper, Analyzing Corporate Tax Evasion, 50 TAX L. REV. 33, 65 (1994) (discussing empirical studies showing "that favorable attitudes to taxpaying, which are believed to be manifest in actual behavior, apparently are associated with the belief that others are paying their share and that the system as a whole is fair," and correlate with higher levels of taxpayer compliance); see also GRAETZ, supra note 122, at 91, 106 (linking increasing tolerance for tax evasion to perceived waste in government spending).
216. See Am. Bar Ass'n Comm'n on Taxpayer Compliance, Report and Recommendations on Taxpayer Compliance, 41 TAX LAW. 329, 335 (1988) (providing statistics on the decline). For an extended discussion of the relationship between social norms and compliance with the law, see generally Lior Jacob Strahilevitz, How Changes in Property Regimes Influence Social Norms: Cornmodifying California's Carpool Lanes, 75 IND. L.J. (forthcoming 2000).
217. See Am. Bar Ass'n Comm'n on Taxpayer Compliance, Report and Recommendations on Taxpayer Compliance, 41 TAX LAW. 329, 335 (1988) (providing statistics on the decline). For an extended discussion of the relationship between social norms and compliance with the law, see generally Lior Jacob Strahilevitz, How Changes in Property Regimes Influence Social Norms: Cornmodifying California's Carpool Lanes, 75 IND. L.J. (forthcoming 2000).
218. See James Aim et al., Why Do People Pay Taxes?, 48 J. PUB. ECON. 21, 32-34 (1992) (discussing how these factors affect tax compliance).
219. Joshua D. Rosenberg, The Psychology of Taxes: Why They Drive Us Crazy, and How We Can Make Them Sane, 16 VA. TAX. REV. 155, 180 (1996).
220. See Fox, supra note 56, at 1091. Fox mentions that the federal income tax may be the least popular tax because it collects the most revenue. See id. Though plausible, that logic is not completely satisfying because it does not explain why the state property tax is much less popular than the state income tax.
221. See Roger Conner, Communitarianism: A New Balance Between Rights and Responsibilities, in BUILDING A COMMUNITY OF CITIZENS 305, 306-17 (Don E. Eberly ed., 1994) (arguing that lower levels of civic involvement result in an increasing number of Americans attempting to cheat the government). To the extent that one believes that communitarian ties within a state are no stronger than they are at the national level, requisitions finance would make no difference. Nevertheless, even if one assumes that the only functional communitarian units are local (or even neighborhood) governments, then the states could still arrange a devolved tax system so as to maximize compliance by requiring each municipality, county, or school district to contribute a quota of revenue to the state's coffers. See infra Part V.B. (discussing subdevolution).
222. Cf. Richard D. Schwartz & Sonya Orleans, On Legal Sanctions, 34 U. CHI. L. REV. 274, 290-99 (1966) (concluding, based on an empirical study, that appeals to community norms and conscience are the most effective means of promoting taxpayer compliance). There is a dearth of empirical evidence demonstrating whether tax-shirking is higher or lower at various levels of the federal system. In the American context it is virtually impossible to test this assertion because different levels of government impose different kinds of taxes; and even when they administer the same kinds of tax, governments continually share information that is used for enforcement purposes. Thus, while states must spend less than the federal government on enforcement efforts for their respective individual income taxes, this burden may result largely from the ability of states to piggy-back on IRS enforcement efforts. See infra notes 326-330 and accompanying text.
223. See sources cited supra note 108; cf. Liner, supra note 40, at 12 (citing empirical studies confirming "that the states have indeed made progress in the minds of the public and the media, and have in fact become a principal innovator and manager in the intergovernmental system").
224. See supra text accompanying note 153 (noting the connection between compliance and support for government spending practices).
225. See Charles M. Tiebout, A Pure Theory of Local Expenditures, 64 J. POL. ECON. 416 (1956). Tiebout assumed that citizens "shop" for political jurisdictions that most accurately reflect their preferences and locate in the jurisdiction that best satisfies their desires. As long as exit costs are ignored and the taxes paid by an individual reflect the marginal cost of extending government services to that individual, the outcome will be Pareto efficient. See id. at 422.
226. This issue is considered infra Part IV.C.
227. The implication here is that senior citizens love to vote and lobby public officials. See LIOR JACOB STRAHILEVITZ, SHADES OF GRAY: INTERGENERATIONAL EQUITY IN THE ERA OF ENTITLEMENT REFORM 17-24 (1997).
228. Admittedly, economic feedback effects will constrain some states from becoming completely homogeneous or from pursuing some groups of people to the exclusion of all others. For example, in the text's hypothetical, stated will likely lose jobs, as well as residents, to state B. This will mean that corporate taxes, payroll taxes, and other possible sources of state revenues will flow from state A to state B. But even so, that will not deter some states from actively attempting to woo seniors. See Francis X. Clines, West Virginia, Home of the Gray in America, N.Y. TIMES, July 17, 1999, at 8 (discussing West Virginia's efforts to recruit retirees).
229. Tiebout's hypothesis has its critics who cast doubt on the real-world relevance of this theory. One critique of Tiebout stems from the high cost of obtaining information. Urban areas containing a number of local governments, each with different tax regimes, appear to be the ideal test case for the Tiebout hypothesis. However, even in those situations, taxpayers typically lack the information about tax levels and government services that are necessary to allow them to accurately "vote with their feet." See David Lowery & William E. Lyons, The Impact of Jurisdictional Boundaries: An Individual-Level Test of the Tiebout Model, 51 J. OF POL. 73 (1989). Also note the normative critique of the Tiebout hypothesis - those without resources have fewer choices about where to live than those with resources. We are less comfortable with this constraint on choices among governments than we are with constraining choices in the private sector. This is particularly true where government-induced Tiebout mobility exacerbates racial discrimination and segregation.
230. In many respects this debate parallels the one that rages among communitarians over international immigration policy. For an interesting review, see generally Daniel J. Tichenor, Immigration and Political Community in the United States, in NEW COMMUNITARIAN THINKING, supra note 83, at 259.
231. See Charles Taylor, The Modern Identity, in COMMUNITARIANISM: A NEW PUBLIC ETHICS 55, 70 (M. Daly ed., 1994) ("[F]reedom of mobility has begun to destroy the very conditions, in family and citizen community, of the identity of freedom."); Walzer, supra note 83, at 58 ("The sense of place must be greatly weakened by . . . extensive geographic mobility, although I find it
232. See Charles Taylor, The Modern Identity, in COMMUNITARIANISM: A NEW PUBLIC ETHICS 55, 70 (M. Daly ed., 1994) ("[F]reedom of mobility has begun to destroy the very conditions, in family and citizen community, of the identity of freedom."); Walzer, supra note 83, at 58 ("The sense of place must be greatly weakened by . . . extensive geographic mobility, although I find it hard to say whether it is superseded by mere insensitivity or by a new sense of many places. Either way, communitarian feeling seems likely to decline in importance.").
233. See CLARK, supra note 95, at 140 (arguing that community integrity is maximized when people settle in a place after being given real choices about where to live); see also Powell, supra note 21, at 78 ("Communitarian federalism not only facilitates the identification of a community's political norms; it also affords individuals ample opportunities to revise their commitments and conduct if they so wish.").
234. See CLARK, supra note 95, at 140 (arguing that community integrity is maximized when people settle in a place after being given real choices about where to live); see also Powell, supra note 21, at 78 ("Communitarian federalism not only facilitates the identification of a community's political norms; it also affords individuals ample opportunities to revise their commitments and conduct if they so wish.").
235. DAVID INGRAM, REASON, HISTORY, & POLITICS: THE COMMUNITARIAN GROUNDS OF LEGITIMATION IN THE MODERN AGE 116 (1995).
236. See DONOHUE, supra note 108, at 41.
237. Peter H. Schuck, Introduction: Some Reflections on the Federalism Debate, 13 YALE J. ON REG. 1, 13 (1996). The challenges faced by Senate candidate Hillary Clinton in learning the political culture of New York State and understanding the peculiar issues that matter to New York's constituencies is an excellent example.
238. See DONOHUE, supra note 108, at 46 ("Even Rhode Island, however, is far larger than the intimate republics that Montesquieu envisioned . . . . States, even in principle, fall short of the ideal of grassroots democracy."); Rubin & Feely, supra note 115, at 940 ("American states are far too large to function as affective communities.").
239. See DONOHUE, supra note 108, at 46 ("Even Rhode Island, however, is far larger than the intimate republics that Montesquieu envisioned . . . . States, even in principle, fall short of the ideal of grassroots democracy."); Rubin & Feely, supra note 115, at 940 ("American states are far too large to function as affective communities.").
240. Amitai Etzioni, Old Chestnuts and New Spurs, in NEW COMMUNITARIAN THINKING, supra note 83, at 16, 23.
241. See generally DANIEL ELAZAR, AMERICAN FEDERALISM: A VIEW FROM THE STATES (3d ed., .1984) (discussing variations in state culture).
242. See LONG, supra note 86, at 29.
243. The distinction alluded to in the text roughly tracks the difference between unintentional and intentional communities. My view is that intentional, or ideological, communities are more normatively attractive because they are likely to be characterized by stronger bonds between community members. One need not believe that ideology is stronger than history in order to accept such a view. As ideological communities mature, their members presumably will acquire the similar life-shaping experiences and memories that are shared by members of unintentional communities. By contrast, there is little evidence that ideologies converge among members of unintentional communities.
244. See THE FEDERALIST No. 51, at 325 (James Madison) (Clinton Rossiter ed., 1961).
245. For the classic description of the role of interest groups in American politics, see generally DAVID.B. TRUMAN, THE GOVERNMENTAL PROCESS: POLITICAL INTERESTS AND PUBLIC OPINION (2d. ed. 1971). Truman's pluralist vision is, by contemporary standards, rather sympathetic to narrow interest groups' influence over policy. For a more hostile analysis of the role of interest groups at the national political level, see generally MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION: PUBLIC GOODS AND THE THEORY OF GROUPS (1976).
246. For the classic description of the role of interest groups in American politics, see generally DAVID.B. TRUMAN, THE GOVERNMENTAL PROCESS: POLITICAL INTERESTS AND PUBLIC OPINION (2d. ed. 1971). Truman's pluralist vision is, by contemporary standards, rather sympathetic to narrow interest groups' influence over policy. For a more hostile analysis of the role of interest groups at the national political level, see generally MANCUR OLSON, THE LOGIC OF COLLECTIVE ACTION: PUBLIC GOODS AND THE THEORY OF GROUPS (1976).
247. See William Blatt, The American Dream in Legislation: The Role of Popular Symbols in Wealth Tax Policy, 51 TAX L. REV. 287, 308-10 (1996) (stating that powerful special interests influence tax legislation); Ronald F. Wilson, Federal Tax Policy: The Political Influence of American Small Business, 37 S. TEX. L. REV. 15, 32-59 (1996) (discussing the role of a particular special interest in influencing tax policy).
248. See William Blatt, The American Dream in Legislation: The Role of Popular Symbols in Wealth Tax Policy, 51 TAX L. REV. 287, 308-10 (1996) (stating that powerful special interests influence tax legislation); Ronald F. Wilson, Federal Tax Policy: The Political Influence of American Small Business, 37 S. TEX. L. REV. 15, 32-59 (1996) (discussing the role of a particular special interest in influencing tax policy).
249. See Clay Chandler, Small Interests Targeted for Big Tax Breaks, WASH. POST, June 29, 1997, at A1 (describing, inter alia, Alaskan truck drivers, airline pilots, laborers in fishing camps who eat meals away from home, 40 Native American whaling captains, wealthy households who established certain kinds of trust funds before 1984, sky divers who must pay an airline ticket tax before jumps, relatives of police officers killed in the line of duty, and low-income farmers who sell aging cows or draft horses as big winners of a recently passed tax bill).
250. For example, the four largest tax expenditures in the 1998 budget were for employer contributions to medical insurance and care, employer contributions to pension plans, the home mortgage interest deduction, and the stepped up basis for capital gains at death. See William C. Whitford, Remarkable, 76 N.C. L. REV. 1639, 1647 (1998).
251. See Art Pine, Tax Bill Peppered with Breaks for Special Interests, L.A. TIMES, Aug. 2, 1997, at 11A (describing new tax breaks for hard cider brewers, Amtrak, the Big-3 American auto makers, pharmaceutical firms developing vaccines, life insurance companies earning profits overseas, software makers, service-station chains selling gasoline to local governments, Amway, the Archer-Daniels-Midland Company, and Texas's Sammons Enterprises, Inc.).
252. Compare JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT (1962) (providing a theoretical argument for why state tax codes should be cleaner), and F.H. Buckley & Margaret F. Brinig, Welfare Magnets: The Race for the Top, 5 SUP. CT. ECON. REV. 141, 153 (1997) (arguing that interest groups are much stronger at the federal level than at the state and local level), with DONOHUE, supra note 108, at 49 (arguing that state legislatures are just as susceptible to special interest influence as Congress is, and that as more of the stakes have shifted to the states in recent years, lobbyists have followed).
253. Compare JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT (1962) (providing a theoretical argument for why state tax codes should be cleaner), and F.H. Buckley & Margaret F. Brinig, Welfare Magnets: The Race for the Top, 5 SUP. CT. ECON. REV. 141, 153 (1997) (arguing that interest groups are much stronger at the federal level than at the state and local level), with DONOHUE, supra note 108, at 49 (arguing that state legislatures are just as susceptible to special interest influence as Congress is, and that as more of the stakes have shifted to the states in recent years, lobbyists have followed).
254. Compare JAMES M. BUCHANAN & GORDON TULLOCK, THE CALCULUS OF CONSENT (1962) (providing a theoretical argument for why state tax codes should be cleaner), and F.H. Buckley & Margaret F. Brinig, Welfare Magnets: The Race for the Top, 5 SUP. CT. ECON. REV. 141, 153 (1997) (arguing that interest groups are much stronger at the federal level than at the state and local level), with DONOHUE, supra note 108, at 49 (arguing that state legislatures are just as susceptible to special interest influence as Congress is, and that as more of the stakes have shifted to the states in recent years, lobbyists have followed).
255. Cf. HENRY N. BUTLER & JONATHAN R. MACEY, USING FEDERALISM TO IMPROVE ENVIRONMENTAL POLICY 21-22 (1996) (arguing that the federal government's monopoly over environmental regulation makes it a less efficient regulator than the states, which are forced to compete with each other to produce the most efficient basket of policies).
256. This argument would not apply to special interests exclusively. Without the economies of scale stemming from being able to operate at the federal level, some public-spirited watchdog organizations, ranging from Common Cause to the National Taxpayer's Union, might be unable to operate effectively.
257. See BRETON, supra note 70, at 115. Cf. PAUL E. PETERSON, THE PRICE OF FEDERALISM 36-37 (1995) (noting that interest groups advocating redistribution of wealth tend to focus their efforts on Congress, while interest groups seeking to promote economic development focus on state and local government decision-makers).
258. See BRETON, supra note 70, at 115. Cf. PAUL E. PETERSON, THE PRICE OF FEDERALISM 36-37 (1995) (noting that interest groups advocating redistribution of wealth tend to focus their efforts on Congress, while interest groups seeking to promote economic development focus on state and local government decision-makers).
259. See Vaughan, supra note 54, at 28 (noting that the states' role in shaping overall tax policy is limited).
260. See JEROME R. HELLERSTEIN & WALTER HELLERSTEIN, STATE AND LOCAL TAXATION: CASES AND MATERIALS 933 (5th ed. 1988).
261. If the federal code is cleaner, even under the status quo, then we should anticipate, all else being equal, that requisitions finance would prompt greater citizen frustration than currently exists.
262. A more extensive discussion of this possibility appears below. See infra Section IV.F (discussing tax exporting).
263. In reality, because of log-rolling, the fat cat frequently only needs to convince one powerful member of Congress to back the provision and never needs to interact with the many legislators who will dutifully vote for the tax expenditure in anticipation of reciprocal favors from its sponsor.
264. See supra note 153 and accompanying text (noting that people are more likely to refuse to comply with federal income tax requirements if they perceive their taxes benefiting "far-flung" special interests).
265. See Advisory Comm'n on Intergovernmental Relations, The Taxpayers Speak: Proposition 13 and Intergovernmental Relations, INTERGOVERNMENTAL PERSP., Summer 1978, at No. 3. For a general discussion of Proposition 13 and its fiscal consequences for state and local governments in California, see Julie K. Koyama, Comment, Financing Local Government in the Post- Proposition 13 Era: The Use and Effectiveness of Nontaxing Revenue Sources, 22 PAC. L.J. 1333 (1991).
266. See Advisory Comm'n on Intergovernmental Relations, The Taxpayers Speak: Proposition 13 and Intergovernmental Relations, INTERGOVERNMENTAL PERSP., Summer 1978, at No. 3. For a general discussion of Proposition 13 and its fiscal consequences for state and local governments in California, see Julie K. Koyama, Comment, Financing Local Government in the Post-Proposition 13 Era: The Use and Effectiveness of Nontaxing Revenue Sources, 22 PAC. L.J. 1333 (1991).
267. See generally Lior Jacob Strahilevitz, The Balanced Budget Amendment and Social Security: An Alternative Means of Judicial Enforcement, 22 SETON HALL LEGIS. J. 513, 525-27 (1998) (discussing judicial enforcement of such requirements).
268. For a general discussion of the perils of governance by referenda, see Sherman J. Clark, A Populist Critique of Direct Democracy, 112 HARV. L. REV. 434 (1998).
269. See generally JEFFREY H. BIRNBAUM & AIAN S. MURRAY, SHOWDOWN AT GUCCI GULCH: LAWMAKERS, LOBBYISTS, AND THE UNLIKELY TRIUMPH OF TAX REFORM (1987) (discussing the impediments to base-broadening reform and how they have been overcome).
270. See David R. Lagasse, Note, Undue Influence: Corporate Political Speech, Power, and the Initiative Process, 61 BROOK. L. REV. 1347, 1347-48 (1995) (citing originally popular initiatives that were soundly defeated in California, Massachusetts, Ohio, and Oregon after corporate opponents far outspent initiative proponents); see also Wilson, supra note 180, at 49 (describing massive spending by the small business lobby to defeat a proposition requiring employer-mandated health insurance coverage).
271. See David R. Lagasse, Note, Undue Influence: Corporate Political Speech, Power, and the Initiative Process, 61 BROOK. L. REV. 1347, 1347-48 (1995) (citing originally popular initiatives that were soundly defeated in California, Massachusetts, Ohio, and Oregon after corporate opponents far outspent initiative proponents); see also Wilson, supra note 180, at 49 (describing massive spending by the small business lobby to defeat a proposition requiring employer-mandated health insurance coverage).
272. For example, in the 1998 election, Proposition 10, a California proposition that increased cigarette taxes and spent the revenue on health programs for children, narrowly passed, despite the fact that opponents outspent proponents by a five-to-one margin. See Statelines California: Anti-Tobacco Initiative Squeaks By, AM. HEALTH LINE, Nov. 13, 1998, at 6. Such victories, however, are aberrations; when opponents outspend proponents by a two-to-one or greater margin, 87% of all initiatives fail. See Jamin B. Raskin, Direct Democracy, Corporate Power and Judicial Review of Popularly-Enacted Campaign Finance Reform, 1996 ANN. SURV. AM. L. 393, 399.
273. For example, in the 1998 election, Proposition 10, a California proposition that increased cigarette taxes and spent the revenue on health programs for children, narrowly passed, despite the fact that opponents outspent proponents by a five-to-one margin. See Statelines California: Anti-Tobacco Initiative Squeaks By, AM. HEALTH LINE, Nov. 13, 1998, at 6. Such victories, however, are aberrations; when opponents outspend proponents by a two-to- one or greater margin, 87% of all initiatives fail. See Jamin B. Raskin, Direct Democracy, Corporate Power and Judicial Review of Popularly-Enacted Campaign Finance Reform, 1996 ANN. SURV. AM. L. 393, 399.
274. That would be me.
275. RICHARD A. MUSGRAVE, THE THEORY OF PUBLIC FINANCE (1959).
276. See id. at 181.
277. See Oates, supra note 80, at 132.
278. See supra note 70 (citing empirical work that casts doubt on the veracity of Musgrave's claim).
279. See JOSEPH A. PECHMAN, THE RICH, THE POOR, AND THE TAXES THEY PAY 37-38 (1986) (finding that between 1966 and 1985 the federal tax system became less progressive while "state and local tax [systems] became more . . . progressive or retained the same degree of progressivity"). In fairness, it appears that federal tax progressivity did increase after 1985, see Richard Kasten, Trends in Federal Tax Progressivity, 1980-93, in TAX PROGRESSIVITY AND INCOME INEQUALITY 1, 47 (Joel Slemrod ed., 1994), and that some state taxes became more progressive while others became more regressive during the 1980s, see Gilbert E. Metcalf, The Lifetime Incidence of State and Local Taxes: Measuring Changes During the 1980s, in TAX PROGRESSIVITY AND INCOME INEQUALITY, supra, at 59.
280. See JOSEPH A. PECHMAN, THE RICH, THE POOR, AND THE TAXES THEY PAY 37-38 (1986) (finding that between 1966 and 1985 the federal tax system became less progressive while "state and local tax [systems] became more . . . progressive or retained the same degree of progressivity"). In fairness, it appears that federal tax progressivity did increase after 1985, see Richard Kasten, Trends in Federal Tax Progressivity, 1980-93, in TAX PROGRESSIVITY AND INCOME INEQUALITY 1, 47 (Joel Slemrod ed., 1994), and that some state taxes became more progressive while others became more regressive during the 1980s, see Gilbert E. Metcalf, The Lifetime Incidence of State and Local Taxes: Measuring Changes During the 1980s, in TAX PROGRESSIVITY AND INCOME INEQUALITY, supra, at 59.
281. See JOSEPH A. PECHMAN, THE RICH, THE POOR, AND THE TAXES THEY PAY 37-38 (1986) (finding that between 1966 and 1985 the federal tax system became less progressive while "state and local tax [systems] became more . . . progressive or retained the same degree of progressivity"). In fairness, it appears that federal tax progressivity did increase after 1985, see Richard Kasten, Trends in Federal Tax Progressivity, 1980-93, in TAX PROGRESSIVITY AND INCOME INEQUALITY 1, 47 (Joel Slemrod ed., 1994), and that some state taxes became more progressive while others became more regressive during the 1980s, see Gilbert E. Metcalf, The Lifetime Incidence of State and Local Taxes: Measuring Changes During the 1980s, in TAX PROGRESSIVITY AND INCOME INEQUALITY, supra, at 59.
282. See RAIMONDO, supra note 102, at 200 (concluding that state income taxes are moderately progressive, but "a fear of flight . . . of higher income individuals from one state to another tempers any progressive tax leanings that state tax planners might harbor").
283. See Vaughan, supra note 54, at 42-44; supra notes 145-146 and accompanying text (comparing Vermont and New Hampshire).
284. See Charles R. O'Kelley, Jr., Tax Policy for Post-Liberal Society: A Flat-Tax-Inspired Redefinition of the Purpose and Ideal Structure of a Progressive Income Tax, 58 S. CAL. L. REV. 727, 737 n.29 (1985); Selznick, supra note 117, at 450-51, 454; see also Robert A. Baruch Bush, Between Two Worlds: The Shift from Individual to Group Responsibility in the Law of Causation of Injury, 33 UCLA L. REV. 1473, 1540 (1986) ("[T]hrough the shared reflection and common enterprise required in constitutive communities, individuals could more readily realize and sustain intrinsic values such as friendship, loyalty, and charity.").
285. See Charles R. O'Kelley, Jr., Tax Policy for Post-Liberal Society: A Flat-Tax-Inspired Redefinition of the Purpose and Ideal Structure of a Progressive Income Tax, 58 S. CAL. L. REV. 727, 737 n.29 (1985); Selznick, supra note 117, at 450-51, 454; see also Robert A. Baruch Bush, Between Two Worlds: The Shift from Individual to Group Responsibility in the Law of Causation of Injury, 33 UCLA L. REV. 1473, 1540 (1986) ("[T]hrough the shared reflection and common enterprise required in constitutive communities, individuals could more readily realize and sustain intrinsic values such as friendship, loyalty, and charity.").
286. See Charles R. O'Kelley, Jr., Tax Policy for Post-Liberal Society: A Flat-Tax-Inspired Redefinition of the Purpose and Ideal Structure of a Progressive Income Tax, 58 S. CAL. L. REV. 727, 737 n.29 (1985); Selznick, supra note 117, at 450-51, 454; see also Robert A. Baruch Bush, Between Two Worlds: The Shift from Individual to Group Responsibility in the Law of Causation of Injury, 33 UCLA L. REV. 1473, 1540 (1986) ("[T]hrough the shared reflection and common enterprise required in constitutive communities, individuals could more readily realize and sustain intrinsic values such as friendship, loyalty, and charity.").
287. See Mark Neal Aaronson, Scapegoating the Poor: Welfare Reform All Over Again and the Undermining of Democratic Citizenship, 7 HASTINGS WOMEN'S L.J. 213, 214, 239 (1996); Michael M. Burns, Fearing the Mirror: Responding to Beggars in a "Kinder and Gentler America," 19 HASTINGS CONST. L.Q. 783, 836 (1992) ("[I]n recent decades, our defining concerns have shifted from 'production to consumption, from . . . sacrifice to greed, from the public interest to self-interest, . . .' [W]e are experiencing a spiritual malaise, turning ourselves into 'relentless market maximizers' and undermining our commitments to self-cultivation, family, and community.").
288. See Mark Neal Aaronson, Scapegoating the Poor: Welfare Reform All Over Again and the Undermining of Democratic Citizenship, 7 HASTINGS WOMEN'S L.J. 213, 214, 239 (1996); Michael M. Burns, Fearing the Mirror: Responding to Beggars in a "Kinder and Gentler America," 19 HASTINGS CONST. L.Q. 783, 836 (1992) ("[I]n recent decades, our defining concerns have shifted from 'production to consumption, from . . . sacrifice to greed, from the public interest to self-interest, . . .' [W]e are experiencing a spiritual malaise, turning ourselves into 'relentless market maximizers' and undermining our commitments to self-cultivation, family, and community.").
289. See, e.g., PETERSON, supra note 187, at 117; Eric G. Luna, Welfare Fraud and the Fourth Amendment, 24 PEPP. L. REV. 1235, 1244 (1997) (noting that the "welfare queen" image continues to haunt American discourse); Dorothy E. Roberts, The Value of Black Mothers' Work, 26 CONN. L. REV. 871, 873 (1994) ("The image of the lazy Black welfare queen who breeds children to fatten her allowance shapes public attitudes about welfare policy.").
290. See, e.g., PETERSON, supra note 187, at 117; Eric G. Luna, Welfare Fraud and the Fourth Amendment, 24 PEPP. L. REV. 1235, 1244 (1997) (noting that the "welfare queen" image continues to haunt American discourse); Dorothy E. Roberts, The Value of Black Mothers' Work, 26 CONN. L. REV. 871, 873 (1994) ("The image of the lazy Black welfare queen who breeds children to fatten her allowance shapes public attitudes about welfare policy.").
291. See, e.g., PETERSON, supra note 187, at 117; Eric G. Luna, Welfare Fraud and the Fourth Amendment, 24 PEPP. L. REV. 1235, 1244 (1997) (noting that the "welfare queen" image continues to haunt American discourse); Dorothy E. Roberts, The Value of Black Mothers' Work, 26 CONN. L. REV. 871, 873 (1994) ("The image of the lazy Black welfare queen who breeds children to fatten her allowance shapes public attitudes about welfare policy.").
292. See PETERSON, supra note 187, at 112-14.
293. See generally Aaronson, supra note 209; April L. Cherry, Social Contract Theory, Welfare Reform, Race, and the Male Sex-Right, 75 OR. L. REV. 1037, 1041 (1996). In fact, rural whites rely heavily on welfare. See Meredith Blake, Welfare and Coerced Contraception: Morality Implications of State Sponsored Reproductive Control, 34 U. OF LOUISVILLE J. FAM. L. 311, 323-25 (1996).
294. See generally Aaronson, supra note 209; April L. Cherry, Social Contract Theory, Welfare Reform, Race, and the Male Sex-Right, 75 OR. L. REV. 1037, 1041 (1996). In fact, rural whites rely heavily on welfare. See Meredith Blake, Welfare and Coerced Contraception: Morality Implications of State Sponsored Reproductive Control, 34 U. OF LOUISVILLE J. FAM. L. 311, 323-25 (1996).
295. See generally Aaronson, supra note 209; April L. Cherry, Social Contract Theory, Welfare Reform, Race, and the Male Sex-Right, 75 OR. L. REV. 1037, 1041 (1996). In fact, rural whites rely heavily on welfare. See Meredith Blake, Welfare and Coerced Contraception: Morality Implications of State Sponsored Reproductive Control, 34 U. OF LOUISVILLE J. FAM. L. 311, 323-25 (1996).
296. The same dynamic largely explains the widespread sentiment that payments to poor Americans should take precedence over foreign aid programs.
297. The rise of gated communities, private clubs, and other institutions that segregate citizens of communities based on income undoubtedly erodes the parochial desire to help those living in the same state. See SANDEL, supra note 118, at 331-33.
298. See infra text accompanying notes 236-242 (noting empirical studies indicating that people are more likely to support redistribution to members of their own identity group).
299. Cf. Charles Tiefer, "Budgetized" Health Entitlements and the Fiscal Constitution in Congress's 1995-1996 Budget Battle, 33 HARV. J. ON LEGIS. 411, 416 (1996) (discussing the politics of "trust funds" in entitlement policy). An alternative explanation for the parochial / communitarian sentiments lauded here is that self interest fuels the populace's preference that welfare payments stay at home. If food stamps are used within the local economy, they contribute disproportionately to jobs on nearby farms, in local stores, etc. In that case, the lock-box type reasoning might still argue in favor of state-level redistribution, even in those states that receive a relatively high level of federal fonds through national redistribution.
300. A progressive tax scheme that does not involve negative taxation probably provides taxpayers with little "warm glow" from giving. After all, such a scheme cannot be cast as a program that makes the poor richer, only as one that fails to make them even poorer. Thus, even though citizen awareness of the tax code's progressive rate structure is widespread (a glance at the rate schedule and a moment's reflection reveals to all taxpayers that poorer taxpayers pay at a lower average rate, deductions notwithstanding), it may not prompt the same communitarian sentiments of shared sacrifice for the collective good that a welfare pro-gram or community charity does. As for a negative income tax, assuming broad taxpayer awareness of the availability of direct payments to the poorest taxpayers, most citizens proba-bly would perceive the program to be similar to a welfare program insofar as it strengthens community bonds.
301. A simple, but unsuccessful, way of discrediting the local redistribution theory is by pointing to the existing tax structure, which is, as mentioned earlier, progressive at the na-tional level, but less so in most states. However, one can understand this reality as a reaction to two mutually reinforcing phenomena: the enactment of a progressive federal tax (which took the pressure off state governments to instill additional progressivity in their state tax systems), and the widespread adherence of policymakers to the Musgrave "exit" theory. In a dynamic environment, where the federal individual income tax was eliminated, and where the decision over how much redistribution there should be is left entirely to the states, it might well prove that states would design highly progressive rate structures if they managed to overcome their overblown fear of an exodus of wealthy taxpayers in response.
302. See SANDEL, supra note 118, at 205.
303. Cf. Eugene H. Hickok, Jr., Federalism, Citizenship, and Community, in BUILDING A COMMUNITY OF CITIZENS, supra note 158, at 194-95 (describing the Anti-Federalist view that the central government would be too far removed to allow for the flourishing of citizenship and the effective monitoring of government by the populace).
304. See generally Moore, supra note 72, at 1432-33 (discussing the difficulties of making uniform policies responsive to variations in size, social make-up, property, and resources among various state and local jurisdictions).
305. See SANDEL, supra note 118, at 348.
306. See WALZER, supra note 118, at 84.
307. See SANDEL, supra note 118, at 346.
308. Cf. Hickok, supra note 220, at 205 (arguing that devolution generally increases civic involvement in state government).
309. Mark V. Pauly, Income Redistribution as a Local Public Good, 2 J. PUB. ECON. 35 (1973).
310. See id. at 41.
311. Id. at 57.
312. See id. at 37-38; see also Stark, supra note 100, at 501-02 (discussing Pauly's assumptions).
313. Pauly, supra note 226, at 37.
314. The warm glow effect has also been dubbed "impure altruism." The idea is that people derive personal satisfaction from giving to others, and that seeking this satisfaction largely motivates giving. See generally James Andreoni, Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence, 97 J. POL. ECON. 1447, 1448-49 (1989).
315. Pauly, supra note 226, at 37-38.
316. See generally Mary Haan et al., Poverty and Health: Prospective Evidence from the Alameda County Study, 125 AM. J. EPIDEMIOLOGY 989, 989 (1987); William E. Morton et al., Effects of Socioeconomic Status on Incidence of Three Sexually Transmitted Diseases, 6 SEXUALLY TRANSMITTED DISEASES 206 (1979).
317. See generally Mary Haan et al., Poverty and Health: Prospective Evidence from the Alameda County Study, 125 AM. J. EPIDEMIOLOGY 989, 989 (1987); William E. Morton et al., Effects of Socioeconomic Status on Incidence of Three Sexually Transmitted Diseases, 6 SEXUALLY TRANSMITTED DISEASES 206 (1979).
318. See Robert C. Ellickson, Controlling Chronic Misconduct in City Spaces: Of Panhandlers, Skid Rows, and Public-Space Zoning, 105 YALE L.J. 1165, 1181 (1996) (noting that merchants generally regard panhandling as bad for business).
319. Cf. JOHN RAWLS, A THEORY OF JUSTICE 152-53 (1971) (introducing the Rawlsian maximin rule).
320. See HENRI TAJFEL, DIFFERENTIATION BETWEEN SOCIAL GROUPS: STUDIES IN THE SOCIAL PSYCHOLOGY OF INTERGROUP RELATIONS 80 (1978); Henri Tajfel & J.C. Turner, The Social Identity Theory of Intergroup Behavior, in PSYCHOLOGY OF INTERGROUP RELATIONS 7, 13- 14 (S. Worschel & W. Austin eds., 1986).
321. See HENRI TAJFEL, DIFFERENTIATION BETWEEN SOCIAL GROUPS: STUDIES IN THE SOCIAL PSYCHOLOGY OF INTERGROUP RELATIONS 80 (1978); Henri Tajfel & J.C. Turner, The Social Identity Theory of Intergroup Behavior, in PSYCHOLOGY OF INTERGROUP RELATIONS 7, 13-14 (S. Worschel & W. Austin eds., 1986).
322. See Robyn M. Dawes et al., Cooperation for the Benefit of Us - Not Me, or My Conscience, in BEYOND SELF INTEREST 97, 99 (J.J. Manbridge ed., 1990).
323. See C. Daniel Batson, Why Act for the Public Good? Four Answers, 20 PERSONALITY & SOC. PSYCHOL. BULL. 603, 605-07 (1994).
324. See Daniel Kahneman & Jack L. Knetsch, Valuing Public Goods: The Purchase of Moral Satisfaction, 22 J. ENV. ECON. & MGMT. 57, 65 tbl.2 (1992).
325. Id.
326. Id. The researchers do not conjecture as to the cause of this variation. Their primary interest is in using all these examples to show the existence of embedding effects and how they can influence contingent valuation method studies.
327. Id.
328. See Pauly, supra note 226, at 51 ("[I]t is clearly possible that aggregate redistribution may be greater under a system of local governments than under a unitary one . . . since it is possible for the level chosen in each community to be greater than that which would have been chosen by a unitary government."); id. at 57 ("Welfare payments or taxes which are uniform with respect to location are inconsistent with Pareto optimality in the utility-interdependence sense, and may lead to lower average levels of redistribution.").
329. Then again, it might not. There is clearly something to both the Musgrave theory and Pauly's counter-theory. Which effect is more powerful has not yet been settled. See generally Louis Kaplow, Fiscal Federalism and the Deductibility of State and Local Taxes Under the Federal Income Tax, 82 VA. L. REV. 413, 478 (1996) ("Redistribution, to some extent, may be a local public good.") (emphasis added); Stark, supra note 100, at 502 ("The Pauly theory has had important implications for economic theories of the local welfare role. Other economists have incorporated Pauly's assumptions into economic models of local welfare provision, and even those economists who dissent from the Pauly view seem to defer to the importance of his essay.") (footnotes omitted).
330. Then again, it might not. There is clearly something to both the Musgrave theory and Pauly's counter-theory. Which effect is more powerful has not yet been settled. See generally Louis Kaplow, Fiscal Federalism and the Deductibility of State and Local Taxes Under the Federal Income Tax, 82 VA. L. REV. 413, 478 (1996) ("Redistribution, to some extent, may be a local public good.") (emphasis added); Stark, supra note 100, at 502 ("The Pauly theory has had important implications for economic theories of the local welfare role. Other economists have incorporated Pauly's assumptions into economic models of local welfare provision, and even those economists who dissent from the Pauly view seem to defer to the importance of his essay.") (footnotes omitted).
331. This is a serious assumption. To reiterate, no empirical work testing the relative strength of the two hypotheses was located.
332. Indeed, these states are illustrative examples because there seems to be a fair amount of animosity between northern and southern Californians, and between upstate and downstate New Yorkers. In a 1992 advisory referendum, voters in 27 of California's northern counties voted to secede from the rest of the state. See A Split California? 27 Counties Want To Form New State, ORANGE COUNTY REG., June 3, 1992, at A10. Two years later, the state's voters rejected a ballot initiative to do just that.
333. Pauly, supra note 226, at 45 (citations omitted).
334. Admittedly there is some tension between this assertion and the one that people are likely to sort themselves according to the types of communities in which they would prefer to live if requisitions were implemented. As the Pauly statement makes clear, states are best thought of as entities that foster a balance between these two competing visions: large enough so that they will always contain at least pockets of poverty, but small enough so that they can offer a more cohesive sense of community than the nation as a whole can.
335. For those who still prioritize progressivity in the tax code, but remain unconvinced by the theoretical and empirical case that this Article has made, another option remains: Replace a less progressive federal tax, such as the payroll tax, with requisitions finance. That way systemic progressivity would likely be improved without sacrificing the communitarian benefits discussed herein. For a brief discussion of the possibilities, see supra note 8 and accompanying text.
336. A wonderful passage from The Federalist illustrates how dramatic the nation's transformation has been in the intervening years: Many considerations . . . seem to place it beyond doubt that the first and most natural attachment to the people will be to the governments of their respective States. . . . If . . . the people should in the future become more partial to the federal government than to the State governments, the change can only result from such manifest and irresistible proofs of a better administration as will overcome all their antecedent propensities. THE FEDERALIST No. 46, at 294-95 (James Madison) (Clinton Rossiter ed., 1961).
337. Rubin and Feely certainly exaggerate, but their statement that "the United States has one political community, and that political community is the United States" does make for an excellent soundbyte. Rubin & Feely, supra note 115, at 945. But cf. Mashaw & Calsyn, supra note 79, at 310 ("Americans generally view themselves as Americans first and citizens of their states second."); William A. Schambra, From Self-interest to Social Obligation: Local Communities v. the National Community, in MEETING HUMAN NEEDS 33, 38 (Jack A. Meyer ed., 1982) (arguing that the national community is breaking down, and that people are withdrawing into local communities).
338. Rubin and Feely certainly exaggerate, but their statement that "the United States has one political community, and that political community is the United States" does make for an excellent soundbyte. Rubin & Feely, supra note 115, at 945. But cf. Mashaw & Calsyn, supra note 79, at 310 ("Americans generally view themselves as Americans first and citizens of their states second."); William A. Schambra, From Self-interest to Social Obligation: Local Communities v. the National Community, in MEETING HUMAN NEEDS 33, 38 (Jack A. Meyer ed., 1982) (arguing that the national community is breaking down, and that people are withdrawing into local communities).
339. Rubin and Feely certainly exaggerate, but their statement that "the United States has one political community, and that political community is the United States" does make for an excellent soundbyte. Rubin & Feely, supra note 115, at 945. But cf. Mashaw & Calsyn, supra note 79, at 310 ("Americans generally view themselves as Americans first and citizens of their states second."); William A. Schambra, From Self-interest to Social Obligation: Local Communities v. the National Community, in MEETING HUMAN NEEDS 33, 38 (Jack A. Meyer ed., 1982) (arguing that the national community is breaking down, and that people are withdrawing into local communities).
340. The recent inroads that country music has made into the midwestern and northeastern states is an important counter-example, and may be an indication (combined with the increased national appeal of Louisiana zydeco and urban gangsta rap) that music is becoming less regionally determinant than it has been in the past.
341. The Olympic Games and, more recently, the Women's World Cup Soccer team are rare exceptions to this trend. But even there, the vehemence of communal feeling that surrounds the success of an outstanding American gold medal winner (e.g., Michael Johnson's world record in the 200 meters or the Dream Team's basketball exploits) does not foster anywhere near the same type of mass euphoria that ensued in New York after yet another Yankees World Series triumph, or Colorado after the Denver Broncos' recent Super Bowl victory).
342. See DONOHUE, supra note 108, at 42-43, 237 (discussing the value of state autonomy in the highway safety and law enforcement areas).
343. See Rosenberg, supra note 156, at 155 (noting that the tax code is "always a source of displeasure").
344. The tax code is on the same track as non-means tested entitlements, which renders it better insulated from legislative change than discretionary spending. Moreover, discretionary spending programs will, assuming they find their way into appropriations bills via the usual mechanisms, have more fingerprints on them than tax bills will. See AARON WILDAVSKY, THE NEW POLITICS OF THE BUDGETARY PROCESS 354-62 (2d ed. 1992).
345. See generally Marjorie E. Kornhauser, Equality, Liberty, and a Fair Income Tax, 23 FORDHAM URB. L.J. 607, 608 (1996) (suggesting that the complexity of the tax code "stems from America's complex sense of distributive justice").
346. See Clinton, Democrats Unite on Patient 'Bill of Rights,' BALT. SUN, Jan. 15, 1998, at 4A (noting Republican divisions over the tax issue).
347. See supra notes 141-142 and accompanying text (noting that the appearance of government responsiveness to participation raises expectations, which are subsequently dashed for losers in a political dispute).
348. Admittedly, the fact that the federal government will siphon off some of the funds generated by economic growth within a state (by making an upward adjustment to the state's quota for the following year to reflect the state's greater relative resources) diminishes states' incentive to pursue tax policies that promote economic growth. Note, however, that the state government will always retain the extra revenue from the first year of unanticipated growth.
349. Justice O'Connor's majority opinion notes: Where the Federal Government directs the States to regulate, it may be state officials who will bear the brunt of public disapproval, while the federal officials who devised the regulatory program may remain insulated from the electoral ramifications of their decision. Accountability is thus diminished when, due to federal coercion, elected state officials cannot regulate in accordance with the views of the local electorate in matters not pre-empted by federal regulation. 505 U.S. 144, 169 (1992); see also D. Bruce La Pierre, Political Accountability in the National Political Process - The Alternative to Judicial Review of Federalism Issues, 80 Nw. U. L. REV. 577, 648-56 (1985) (applying the political-accountability theory to a number of cases in which the Supreme Court confronted federalism issues).
350. Justice O'Connor's majority opinion notes: Where the Federal Government directs the States to regulate, it may be state officials who will bear the brunt of public disapproval, while the federal officials who devised the regulatory program may remain insulated from the electoral ramifications of their decision. Accountability is thus diminished when, due to federal coercion, elected state officials cannot regulate in accordance with the views of the local electorate in matters not pre-empted by federal regulation. 505 U.S. 144, 169 (1992); see also D. Bruce La Pierre, Political Accountability in the National Political Process - The Alternative to Judicial Review of Federalism Issues, 80 Nw. U. L. REV. 577, 648-56 (1985) (applying the political-accountability theory to a number of cases in which the Supreme Court confronted federalism issues).
351. In the context of this Article, "utilitarian" refers to a means of analysis that compares the economic costs and benefits of a requisitions finance system to the current system of largely centralized revenue collection. A utilitarian fundamentalist might point out that a system that is more economically efficient than the status quo could nevertheless impose more disutility than utility on society. However, this Article ignores that possibility and presumes that such a system in fact improves society's welfare. In so doing, I follow the traditional "utilitarian" tax scholarship. For examples of this scholarship, see Louis Kaplow, A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism, 48 NAT'LTAX J. 497 (1995); and Daniel Shaviro, The Minimum Wage, the Earned Income Tax Credit, and Optimal Subsidy Policy, 64 U. CHI. L. REV. 405 (1997).
352. In the context of this Article, "utilitarian" refers to a means of analysis that compares the economic costs and benefits of a requisitions finance system to the current system of largely centralized revenue collection. A utilitarian fundamentalist might point out that a system that is more economically efficient than the status quo could nevertheless impose more disutility than utility on society. However, this Article ignores that possibility and presumes that such a system in fact improves society's welfare. In so doing, I follow the traditional "utilitarian" tax scholarship. For examples of this scholarship, see Louis Kaplow, A Fundamental Objection to Tax Equity Norms: A Call for Utilitarianism, 48 NAT'LTAX J. 497 (1995); and Daniel Shaviro, The Minimum Wage, the Earned Income Tax Credit, and Optimal Subsidy Policy, 64 U. CHI. L. REV. 405 (1997).
353. See generally Gregory v. Ashcroft, 501 U.S. 452, 458 (1991) (describing the experimentation and innovation-inducing benefits of granting states authority over policy spheres); New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting) ("It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.").
354. See generally Gregory v. Ashcroft, 501 U.S. 452, 458 (1991) (describing the experimentation and innovation-inducing benefits of granting states authority over policy spheres); New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting) ("It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.").
355. See Nancy E. Shurtz, A Critical View of Traditional Tax Policy Theory: A Pragmatic Alternative, 31 VILL. L. REV. 1665, 1699 & n.145 (1986) (describing the process the administration used to reach that conclusion).
356. See John W. Lee, Critique of Current Congressional Capital Gains Contentions, 15 VA. TAX REV. 1, 66-67 (1995) (summarizing assessments of the 1981 tax cuts); Lee A. Sheppard, Supply Side Economics and the 1981 Tax Cuts Revisited by Joint Economic Committee, 28 TAX NOTES 1423, 1423-24 (1985) (charting the cuts' economic effects); Tiefer, supra note 216, at 412 (linking high deficits to the tax cuts of the early 1980s).
357. See John W. Lee, Critique of Current Congressional Capital Gains Contentions, 15 VA. TAX REV. 1, 66-67 (1995) (summarizing assessments of the 1981 tax cuts); Lee A. Sheppard, Supply Side Economics and the 1981 Tax Cuts Revisited by Joint Economic Committee, 28 TAX NOTES 1423, 1423-24 (1985) (charting the cuts' economic effects); Tiefer, supra note 216, at 412 (linking high deficits to the tax cuts of the early 1980s).
358. See John W. Lee, Critique of Current Congressional Capital Gains Contentions, 15 VA. TAX REV. 1, 66-67 (1995) (summarizing assessments of the 1981 tax cuts); Lee A. Sheppard, Supply Side Economics and the 1981 Tax Cuts Revisited by Joint Economic Committee, 28 TAX NOTES 1423, 1423-24 (1985) (charting the cuts' economic effects); Tiefer, supra note 216, at 412 (linking high deficits to the tax cuts of the early 1980s).
359. See supra note 265 (citing sources suggesting the value of international experiments).
360. See SHAVIRO, supra note 58, at 93.
361. See id. at 93.
362. See Rubin & Feely, supra note 115, at 925 (predicting that each state would wait for the other states to act first).
363. See id. at 926. Indeed, governors may have incentives to try to cook the books so as to justify their policy choices and win voter approval.
364. In other words, when the studies are bad, and the legislators know this, they have a greater incentive to demagogue the tax issue. But if economists and policy analysts provided them with better data, they might alter their behavior.
365. See DONOHUE, supra note 108, at 45.
366. Cf. Michael W. McConnell, Federalism: Evaluating the Founders' Design, 54 U. CHI. L. REV. 1484, 1498 (1987) (reviewing RAOUL BERGER, FEDERALISM: THE FOUNDER'S DESIGN (1987)) (offering these arguments in defense of state experimentation generally).
367. Cf. Michael W. McConnell, Federalism: Evaluating the Founders' Design, 54 U. CHI. L. REV. 1484, 1498 (1987) (reviewing RAOUL BERGER, FEDERALISM: THE FOUNDER'S DESIGN (1987)) (offering these arguments in defense of state experimentation generally).
368. See HY & WAUGH, supra note 65, at 62; LeBoeuf, supra note 20, at 563. Enterprise zones offer a more recent example of the federal government borrowing tax policies from state governments. Congress first enacted enterprise zones in 1993 after a decade of experimentation by the states. See Wilton Hyman, Empowerment Zones, Enterprise Communities, Black Businesses, and Unemployment, 53 WASH. U. J. URB. & CONTEMP. L. 143, 149 (1998).
369. See HY & WAUGH, supra note 65, at 62; LeBoeuf, supra note 20, at 563. Enterprise zones offer a more recent example of the federal government borrowing tax policies from state governments. Congress first enacted enterprise zones in 1993 after a decade of experimentation by the states. See Wilton Hyman, Empowerment Zones, Enterprise Communities, Black Businesses, and Unemployment, 53 WASH. U. J. URB. & CONTEMP. L. 143, 149 (1998).
370. See HY & WAUGH, supra note 65, at 62; LeBoeuf, supra note 20, at 563. Enterprise zones offer a more recent example of the federal government borrowing tax policies from state governments. Congress first enacted enterprise zones in 1993 after a decade of experimentation by the states. See Wilton Hyman, Empowerment Zones, Enterprise Communities, Black Businesses, and Unemployment, 53 WASH. U. J. URB. & CONTEMP. L. 143, 149 (1998).
371. See Kenyon, supra note 69, at 238 (discussing Florida's difficulties with taxation of services).
372. See The Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No. 104-193, 110 Stat. 2105 (to be codified in scattered sections of 7, 8, 21, and 42 U.S.C.).
373. See Lyke Thompson & Donald F. Norris, Introduction to THE POLITICS OF WELFARE REFORM 1, 5-6 (Donald F. Morris & Lyke Thompson eds., 1995) (discussing how successful state experimentation with workfare eventually led the federal government to adopt the approach).
374. See Volden, supra note 144, at 83.
375. See id. at 85 (predicting moderate to high benefits from using the states as laboratories in the welfare reform arena).
376. Congress can, and does, give tax breaks to specific corporations in Montana, but not Vermont. Depending on one's conception of Congress's motivations for doing so, this may either be a blessing or evidence of the inherent corruption likely to develop in any federal system.
377. Twenty-six states saw increases in their Gross State Product and two more saw no change in real terms. See U.S. DEP'T OF COMMERCE, STATISTICAL ABSTRACT OF THE UNITED STATES 450 (1997).
378. See id. The mountain states consist of Montana, Idaho, Wyoming, Colorado, New Mexico, Arizona, Utah, and Nevada.
379. The 1990-91 recession was largely a story about significant economic downturns in California, New England, New York, and Michigan, with steady, albeit unremarkable growth throughout the rest of the nation. See id.; see also Stanley Engerman, Regional Aspects of Stabilization Policy, in ESSAYS IN FISCAL FEDERALISM, supra note 70, at 30-31 ("It appears that regional cyclical differentials are of considerable importance, and that they are caused to a significant degree by specifically regional (as distinct from purely industrial composition) factors. This suggests that regionally-oriented stabilization policies would be desirable if feasible.").
380. A supply-side economist might believe otherwise, although little theorizing has been done with respect to the efficacy of state tax cuts in increasing net state revenue.
381. In other words, assuming that New York's state government accounts for 30% of the taxes collected in New York state, and the federal government accounts for the other 70%; if the state government wishes to provide each household head with a $500 tax credit, it will require that the state government take a revenue hit that is 133% greater - as a percentage of tax revenues - than the hit that would be required if the federal government were to enact a tax cut in the same amount.
382. Cf. Edward J. McCaffery, Tax's Empire, 85 GEO. L.J. 71, 73 (1996) (noting that the tax-cutting efforts of Governors Whitman and Engler propelled them to national prominence).
383. See Jan Ellen Rein, Misinformation and Self-Deception in Recent Long-Term Care Policy Trends, 12 J.L. & POL. 195, 332 n.661 (1996) (noting that Governor Whitman's New Jersey tax cuts failed to increase state revenues, forcing the Governor to raid the state pension fund, freeze state employee salaries, and reschedule debt payments in order to balance the state's budget).
384. For example, a state could cut sales taxes as a means of invigorating retail sales during a slow period and compensate for the lost revenue by raising taxes on short-term capital gains as a means of promoting longer-term investment.
385. Numerous state governments have, in the past fifteen years, turned to enterprise zones as means of influencing macroeconomic activity within the states. Enterprise zones are typically areas of significant poverty where businesses are given significant tax incentives to set up shop or increase employment. Although it appears that these experiments have had some beneficial consequences for the zones in which they have been set up, empirical uncertainty about the effect of enterprise zones on economic conditions remains. See Richard Briffault, The Rise of Sublocal Structures in Urban Governance, 82 MINN. L. REV. 503, 510-11 (1997) (noting that enterprise zones have received "mixed reviews" in terms of their ability to stimulate development); Hyman, supra note 274, at 149-52 (1998) (noting that state experimentation with enterprise zones in the 1980s prompted two major studies, which reached conflicting conclusions about their effectiveness).
386. Numerous state governments have, in the past fifteen years, turned to enterprise zones as means of influencing macroeconomic activity within the states. Enterprise zones are typically areas of significant poverty where businesses are given significant tax incentives to set up shop or increase employment. Although it appears that these experiments have had some beneficial consequences for the zones in which they have been set up, empirical uncertainty about the effect of enterprise zones on economic conditions remains. See Richard Briffault, The Rise of Sublocal Structures in Urban Governance, 82 MINN. L. REV. 503, 510-11 (1997) (noting that enterprise zones have received "mixed reviews" in terms of their ability to stimulate development); Hyman, supra note 274, at 149-52 (1998) (noting that state experimentation with enterprise zones in the 1980s prompted two major studies, which reached conflicting conclusions about their effectiveness).
387. See DONOHUE, supra note 108, at 46-48 (discussing the relationship between decentralization and administrative efficiency).
388. See also supra text accompanying note 98 (noting that the quality of an area's public schools, which will correlate positively with higher taxes, is an important factor influencing many families' decisions about where to live).
389. This assumes states will not be able to tax non-residents to pay for services for residents, or, to the extent that such taxation of outsiders does occur, all states are presumed to be equally effective at doing so. Of course, such an assumption is not entirely realistic. See infra note 332 and accompanying text (noting that imbalances in states' economic positions create power asymmetries in interstate taxation).
390. George Break's explication is particularly clear: Competition among governments may also be a means of controlling the level, as well as the composition, of public spending. A large number of independently operating units, like a large number of separate business enterprises, is likely to be more responsive to consumer demands, and more efficient in satisfying them, than a small number of units each with significant monopoly powers, BREAK, supra note 144, at 15.
391. See supra text accompanying note 165 (noting that niche approaches will result in more politically and socially cohesive communities). Daniel Shaviro points out one important complication to this theory. Voters who prefer high levels of wealth redistribution will not necessarily opt for states with high levels of taxation. They may instead choose to live in low tax states and make large donations to charities that serve redistributive purposes. See SHAVIRO, supra note 58, at 84. This point has particular salience because voters generally prefer direct charitable giving to charitable giving under the auspices of the state. See James Andreoni, Impure Altruism and Donations to
392. See supra text accompanying note 165 (noting that niche approaches will result in more politically and socially cohesive communities). Daniel Shaviro points out one important complication to this theory. Voters who prefer high levels of wealth redistribution will not necessarily opt for states with high levels of taxation. They may instead choose to live in low tax states and make large donations to charities that serve redistributive purposes. See SHAVIRO, supra note 58, at 84. This point has particular salience because voters generally prefer direct charitable giving to charitable giving under the auspices of the state. See James Andreoni, Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving, 100 ECON. J. 464, 470 (1990).
393. It is by no means safe to assume, as Shaviro does, that the wealthiest taxpayers are the ones with the most mobility. See SHAVIRO, supra note 58, at 85. In a narrow sense, of course, moving expenses will be less of a relative burden on wealthy households. On the other hand, wealthy individuals will likely have valuable social and professional circles in their home towns. (Perhaps that is how some of them became wealthy.) In other words, there will not be an exodus of Los Angeles law partners or movie producers to Arizona, no matter how low Arizona's taxes fall. See LONG, supra note 86, at 41 (noting that very high income earners tend not to be mobile); Vaughan, supra note 54, at 109 (observing that the evidence supporting the proposition that rich individuals move from one state to another in order to reduce their tax burdens is weak).
394. It is by no means safe to assume, as Shaviro does, that the wealthiest taxpayers are the ones with the most mobility. See SHAVIRO, supra note 58, at 85. In a narrow sense, of course, moving expenses will be less of a relative burden on wealthy households. On the other hand, wealthy individuals will likely have valuable social and professional circles in their home towns. (Perhaps that is how some of them became wealthy.) In other words, there will not be an exodus of Los Angeles law partners or movie producers to Arizona, no matter how low Arizona's taxes fall. See LONG, supra note 86, at 41 (noting that very high income earners tend not to be mobile); Vaughan, supra note 54, at 109 (observing that the evidence supporting the proposition that rich individuals move from one state to another in order to reduce their tax burdens is weak).
395. It is by no means safe to assume, as Shaviro does, that the wealthiest taxpayers are the ones with the most mobility. See SHAVIRO, supra note 58, at 85. In a narrow sense, of course, moving expenses will be less of a relative burden on wealthy households. On the other hand, wealthy individuals will likely have valuable social and professional circles in their home towns. (Perhaps that is how some of them became wealthy.) In other words, there will not be an exodus of Los Angeles law partners or movie producers to Arizona, no matter how low Arizona's taxes fall. See LONG, supra note 86, at 41 (noting that very high income earners tend not to be mobile); Vaughan, supra note 54, at 109 (observing that the evidence supporting the proposition that rich individuals move from one state to another in order to reduce their tax burdens is weak).
396. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
397. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
398. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
399. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
400. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
401. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
402. Cf. BUTLER & MACEY, supra note 185, at 19-21 (attacking the race-to-the-bottom theory's underpinnings); Buckley & Brinig, supra note 184, at 157-77 (observing that empirical evidence does not support the race-to-the-bottom theory in AFDC payments); Richard L. Revesz, Federalism and Environmental Regulation: A Normative Critique, in THE NEW FEDERALISM, supra note 144, at 97, 105 (criticizing the race-to-the-bottom theory as overly simplistic in the environmental regulatory context); Volden, supra note 144, at 74-75 (rejecting evidence of a race to the bottom in welfare benefits). But see PETERSON, supra note 187, at 108-10 (arguing that a race to the bottom has occurred in AFDC benefit levels). Peterson is the most cited author for the proposition that a race to the bottom is occurring in the realm of welfare benefits. It is worth noting that by a race to the bottom, Peterson apparently only means that real welfare benefit levels have declined. It is far from clear that he can pin the blame on competition between states to avoid becoming welfare magnets. He notes that a national slowdown in economic growth, see id. at 112, a decreased perception that the poor are deserving of assistance, see id. at 114, and a recent increase in federal welfare payments, see id. at 121, all contributed to the reduction in benefit levels. In addition, several authors have concluded that state taxation of corporate income has reflected something of a race towards the bottom, although the race has been proceeding for decades now, and the finish line (the elimination of such taxes) is nowhere in sight. See GEORGE F. BREAK, INTERGOVERNMENTAL FISCAL RELATIONS IN THE UNITED STATES 145 (1967); Vaughan, supra note 54, at 78. Vaughan's findings seem the most plausible. He concludes that states have used the corporate tax code, but not the personal income tax code, to woo wealthy taxpayers from other states. As a result of this competition, states have relied on the personal income tax for an ever-increasing portion of their revenues. However, because wealthy taxpayers are unlikely to move to states because of reduced tax burdens, a race to the bottom in that arena has not been triggered. See supra notes 70, 295.
403. Cf. Volden, supra note 144, at 94 (pointing out that race to the bottom models usually suppose unrealistically low levels of compassion at the state level).
404. In other words, real property cannot relocate itself, but people can. Hence real property is thought of as an immobile tax base.
405. See generally Koyama, supra note 194, at 1333 (discussing California's revolt against the property tax).
406. Indeed, contrast this picture with our understanding of state competition for corporate jobs. Corporations do not vote (although their employees, whose interests are sometimes aligned, do). Thus, when Rhode Island offers a Tennessee firm a sweetheart tax deal in order to induce it to relocate to Providence, Rhode Island's existing firms probably will not mobilize in opposition. Indeed, they may support the move, since they can obtain political leverage by pointing to the deal given the Tennessee company while trying to negotiate deals with the state government that would keep them in Rhode Island. For the individual income tax, however, groups of similarly situated taxpayers tend to be in political competition with other groups of similarly situated taxpayers. Thus, the political dynamic imposes a minimal constraint on the abilities of states to use tax packages to attract corporations but a more serious constraint on the abilities of states to use tax packages to attract residents from other states.
407. In the last few years, a few cases of wealthy taxpayers renouncing their American citizenship in order to reduce their tax liability have been reported. See generally Kenneth D. Heath, The Symmetries of Citizenship: Welfare, Expatriate Taxation, and Stakeholding, 13 GEO. IMMIGR. L.J. 533 (1999); Emmanuelle Lee, Comment, Will the Renunciation of U.S. Citizenship Still Be Worth Some Tax Savings? An Analysis of the Recent Reform on the Taxation of Expatriates, 37 SANTA CLARA L. REV. 1063 (1997). The vast majority of Americans, however, do not see exit as a viable option.
408. In the last few years, a few cases of wealthy taxpayers renouncing their American citizenship in order to reduce their tax liability have been reported. See generally Kenneth D. Heath, The Symmetries of Citizenship: Welfare, Expatriate Taxation, and Stakeholding, 13 GEO. IMMIGR. L.J. 533 (1999); Emmanuelle Lee, Comment, Will the Renunciation of U.S. Citizenship Still Be Worth Some Tax Savings? An Analysis of the Recent Reform on the Taxation of Expatriates, 37 SANTA CLARA L. REV. 1063 (1997). The vast majority of Americans, however, do not see exit as a viable option.
409. See generally BREAK, supra note 296, at 147 (discussing the inefficiencies that result when the central government holds a monopoly on power in a policy arena).
410. See supra Part II.C (discussing this and requisitions finance's other effects on spending generally).
411. See William W. Bratton & Joseph A. McCahery, The New Economics of Jurisdictional Competition: Devolutionary Federalism in a Second-Best World, 86 GEO. L.J. 201, 239-43 (1997) (summarizing the empirical literature).
412. See id. at 261 ("[L]egal federalism questionably predicts that, assuming decentralized regulation subject to competitive influence, competition will produce a first-best outcome. The economics provide no basis for predicting stable, long-term equilibria in competitive lawmaking situations.").
413. See HELLERSTEIN & HELLERSTEIN, supra note 189, at 934.
414. See HY & WAUGH, supra note 65, at 62; SHAVIRO, supra note 58, at 34. Prior to the enactment of federal tax reform in 1986, 30 states linked their income tax base to the federal base, but many of the states abandoned this linkage after 1986. See Kenyon, supra note 69, at 244.
415. See HY & WAUGH, supra note 65, at 62; SHAVIRO, supra note 58, at 34. Prior to the enactment of federal tax reform in 1986, 30 states linked their income tax base to the federal base, but many of the states abandoned this linkage after 1986. See Kenyon, supra note 69, at 244.
416. See HY & WAUGH, supra note 65, at 62; SHAVIRO, supra note 58, at 34. Prior to the enactment of federal tax reform in 1986, 30 states linked their income tax base to the federal base, but many of the states abandoned this linkage after 1986. See Kenyon, supra note 69, at 244.
417. See SHAVIRO, supra note 58, at 35 (noting that 31 states require separate extension requests from federal requests).
418. HELLERSTEIN & HELLERSTEIN, supra note 189, at 933.
419. See Deborah L. Paul, The Sources of Tax Complexity: How Much Simplicity Can Fundamental Tax Reform Achieve?, 76 N.C. L. REV. 151, 216 (1995) (citing Joel Slemrod & Nikki Sorum, The Compliance Cost of the U.S. Individual Income Tax System, 37 NAT'L TAX J. 461, 461 (1984)).
420. See Deborah L. Paul, The Sources of Tax Complexity: How Much Simplicity Can Fundamental Tax Reform Achieve?, 76 N.C. L. REV. 151, 216 (1995) (citing Joel Slemrod & Nikki Sorum, The Compliance Cost of the U.S. Individual Income Tax System, 37 NAT'L TAX J. 461, 461 (1984)).
421. Cf. Paul, supra note 310, at 216 (noting that even the 1986 federal tax reform law did not lower compliance costs for individual taxpayers).
422. See SHAVIRO, supra note 58, at 32.
423. For example, the federal government could provide the states with extremely compelling fiscal incentives to abandon their state income taxes.
424. Indeed, administrative efficiency would favor the centralized, uniform tax system over the devolved one. For instance, taxpayers who move from one state to another may benefit from not having to "re-learn" a new tax system with each move. And having a single uniform tax system would allow even greater information sharing among tax professionals - accountants, tax lawyers, etc. - about how to help taxpayers understand the code.
425. The widespread use of a single Windows-based computer operating system creates benefits for users, who can easily swap software, files, and know-how. The Windows example is an apt one because, like the uniform tax system, its dominance creates a dead weight loss to society, caused by the lack of competitive market discipline. See generally John E. Lopatka & William H. Page, Microsoft, Monopolization, and Network Externalities: Some Uses and Abuses of Economic Theory in Antitrust Decision Making, 40 ANTITRUST BULL. 317 (1995).
426. For example, a state might decide that it has an interest in attracting "early bird" (or "eager beaver") residents; perhaps because state government officials predicted that early filers are also the kind of people who are more likely to seek preventive medical care, thereby lowering the burden on the state's medical insurance programs. To further this goal, the state could establish a March 15 deadline and lower taxes by some amount as an inducement to get early birds to move there.
427. See H & R Block, Inc., Information and Services (visited Nov. 28, 1998) 〈http://www.handrblock.com〉 (noting that H & R Block alone filed one out of every seven regular income tax returns filed with the IRS during the last year and 51% of all electronic returns).
428. Again, commercial preparers dramatically reduce these burdens in the status quo and would be expected to continue to do so under requisitions finance.
429. See LeBoeuf, supra note 20, at 566 (arguing that most governmental activities are characterized by gross diseconomies of scale).
430. See HY & WAUGH, supra note 65, at 82 (noting that the sales tax has both these characteristics); Robert Eisner, The Proposed Sales and Wage Tax-Fair, Flat, or Foolish?, in FAIRNESS AND EFFICIENCY IN THE FLAT TAX 42, 68 (Robert E. Hall et al. eds., 1996) (noting the regressivity of a flat tax on consumption).
431. See HY & WAUGH, supra note 65, at 82 (noting that the sales tax has both these characteristics); Robert Eisner, The Proposed Sales and Wage Tax-Fair, Flat, or Foolish?, in FAIRNESS AND EFFICIENCY IN THE FLAT TAX 42, 68 (Robert E. Hall et al. eds., 1996) (noting the regressivity of a flat tax on consumption).
432. See Fox, supra note 56, at 1092 (surveying 26 states and quantifying their tax collection costs).
433. See Daniel Shaviro, An Economic and Political Look at Federalism in Taxation, 90 MICH. L. REV. 895, 920 (1992).
434. See M. Bernard Aidinoffet al., Report and Recommendations on Taxpayer Compliance, 41 TAX LAW. 329, 335 (1988); Walter T. Henderson, Jr., Comment, Criminal Liability Under the Internal Revenue Code: A Proposal To Make the "Voluntary" Compliance System a Little Less "Voluntary," 140 U. PA. L. REV. 1429, 1430 (1992).
435. See M. Bernard Aidinoffet al., Report and Recommendations on Taxpayer Compliance, 41 TAX LAW. 329, 335 (1988); Walter T. Henderson, Jr., Comment, Criminal Liability Under the Internal Revenue Code: A Proposal To Make the "Voluntary" Compliance System a Little Less "Voluntary," 140 U. PA. L. REV. 1429, 1430 (1992).
436. See JOHN F. DUE & JOHN L. MIKESELL, SALES TAXATION: STATE AND LOCAL STRUCTURE AND ADMINISTRATION 323-25 (1983) (estimating administrative costs to equal 0.73% of revenues collected and taxpayer compliance costs to account for 3.93%); WASHINGTON STATE DEP'T OF REVENUE, PROGRAM ADMIN. SECTION, TAX ADMINISTRATION SURVEY 20 (1988) (estimating administrative costs of .93%).
437. See JOHN F. DUE & JOHN L. MIKESELL, SALES TAXATION: STATE AND LOCAL STRUCTURE AND ADMINISTRATION 323-25 (1983) (estimating administrative costs to equal 0.73% of revenues collected and taxpayer compliance costs to account for 3.93%); WASHINGTON STATE DEP'T OF REVENUE, PROGRAM ADMIN. SECTION, TAX ADMINISTRATION SURVEY 20 (1988) (estimating administrative costs of .93%).
438. The idea here is that state governments tax sales heavily because the federal government has largely crowded them out of taxing income. See James M. Buchanan, Financing a Viable Federalism, in STATE AND LOCAL TAX PROBLEMS 3, 11 (Henry L. Johnson ed., 1969) (discussing the inherent tradeoff between the ability of the state and federal governments to collect tax revenues); Liner, supra note 40, at 13 ("One of the central tenets of devolution is that the tax-paying capacity that once went to federal income taxes has now been released for states and localities to absorb."); cf. HY & WAUGH, supra note 65, at 31 (arguing that the reason local governments rely so heavily on property taxes is not because of their inherent appeal, but rather because federal and state taxing authorities have left property as a largely untapped source of revenue); Metcalf, supra note 205, at 60-61 (noting that during the 1980s [a period in which federal taxes on individual incomes were reduced] the states increasingly came to rely on personal income taxes for revenues); Werner W. Pommerehne, Quantitative Aspects of Federalism: A Study of Six Countries, in THE POLITICAL ECONOMY OF FISCAL FEDERALISM, supra note 85, at 275, 283 ("[In Canada o]ver the last decade, the federal government has substantially reduced its personal income tax and corporation income tax in order to make room for corresponding provincial taxes."). Here it is also worth recalling, as a caveat, the earlier discussion of the potential for a requisitions-induced shift away from income taxes and toward property taxes. See supra text accompanying notes 298-300 (noting that states have incentives to tax unmovable property, but that owners of that property may have equally strong incentives to challenge such taxation through the democratic process).
439. The idea here is that state governments tax sales heavily because the federal government has largely crowded them out of taxing income. See James M. Buchanan, Financing a Viable Federalism, in STATE AND LOCAL TAX PROBLEMS 3, 11 (Henry L. Johnson ed., 1969) (discussing the inherent tradeoff between the ability of the state and federal governments to collect tax revenues); Liner, supra note 40, at 13 ("One of the central tenets of devolution is that the tax-paying capacity that once went to federal income taxes has now been released for states and localities to absorb."); cf. HY & WAUGH, supra note 65, at 31 (arguing that the reason local governments rely so heavily on property taxes is not because of their inherent appeal, but rather because federal and state taxing authorities have left property as a largely untapped source of revenue); Metcalf, supra note 205, at 60-61 (noting that during the 1980s [a period in which federal taxes on individual incomes were reduced] the states increasingly came to rely on personal income taxes for revenues); Werner W. Pommerehne, Quantitative Aspects of Federalism: A Study of Six Countries, in THE POLITICAL ECONOMY OF FISCAL FEDERALISM, supra note 85, at 275, 283 ("[In Canada o]ver the last decade, the federal government has substantially reduced its personal income tax and corporation income tax in order to make room for corresponding provincial taxes."). Here it is also worth recalling, as a caveat, the earlier discussion of the potential for a requisitions-induced shift away from income taxes and toward property taxes. See supra text accompanying notes 298-300 (noting that states have incentives to tax unmovable property, but that owners of that property may have equally strong incentives to challenge such taxation through the democratic process).
440. The idea here is that state governments tax sales heavily because the federal government has largely crowded them out of taxing income. See James M. Buchanan, Financing a Viable Federalism, in STATE AND LOCAL TAX PROBLEMS 3, 11 (Henry L. Johnson ed., 1969) (discussing the inherent tradeoff between the ability of the state and federal governments to collect tax revenues); Liner, supra note 40, at 13 ("One of the central tenets of devolution is that the tax-paying capacity that once went to federal income taxes has now been released for states and localities to absorb."); cf. HY & WAUGH, supra note 65, at 31 (arguing that the reason local governments rely so heavily on property taxes is not because of their inherent appeal, but rather because federal and state taxing authorities have left property as a largely untapped source of revenue); Metcalf, supra note 205, at 60-61 (noting that during the 1980s [a period in which federal taxes on individual incomes were reduced] the states increasingly came to rely on personal income taxes for revenues); Werner W. Pommerehne, Quantitative Aspects of Federalism: A Study of Six Countries, in THE POLITICAL ECONOMY OF FISCAL FEDERALISM, supra note 85, at 275, 283 ("[In Canada o]ver the last decade, the federal government has substantially reduced its personal income tax and corporation income tax in order to make room for corresponding provincial taxes."). Here it is also worth recalling, as a caveat, the earlier discussion of the potential for a requisitions-induced shift away from income taxes and toward property taxes. See supra text accompanying notes 298-300 (noting that states have incentives to tax unmovable property, but that owners of that property may have equally strong incentives to challenge such taxation through the democratic process).
441. The idea here is that state governments tax sales heavily because the federal government has largely crowded them out of taxing income. See James M. Buchanan, Financing a Viable Federalism, in STATE AND LOCAL TAX PROBLEMS 3, 11 (Henry L. Johnson ed., 1969) (discussing the inherent tradeoff between the ability of the state and federal governments to collect tax revenues); Liner, supra note 40, at 13 ("One of the central tenets of devolution is that the tax-paying capacity that once went to federal income taxes has now been released for states and localities to absorb."); cf. HY & WAUGH, supra note 65, at 31 (arguing that the reason local governments rely so heavily on property taxes is not because of their inherent appeal, but rather because federal and state taxing authorities have left property as a largely untapped source of revenue); Metcalf, supra note 205, at 60-61 (noting that during the 1980s [a period in which federal taxes on individual incomes were reduced] the states increasingly came to rely on personal income taxes for revenues); Werner W. Pommerehne, Quantitative Aspects of Federalism: A Study of Six Countries, in THE POLITICAL ECONOMY OF FISCAL FEDERALISM, supra note 85, at 275, 283 ("[In Canada o]ver the last decade, the federal government has substantially reduced its personal income tax and corporation income tax in order to make room for corresponding provincial taxes."). Here it is also worth recalling, as a caveat, the earlier discussion of the potential for a requisitions-induced shift away from income taxes and toward property taxes. See supra text accompanying notes 298-300 (noting that states have incentives to tax unmovable property, but that owners of that property may have equally strong incentives to challenge such taxation through the democratic process).
442. The idea here is that state governments tax sales heavily because the federal government has largely crowded them out of taxing income. See James M. Buchanan, Financing a Viable Federalism, in STATE AND LOCAL TAX PROBLEMS 3, 11 (Henry L. Johnson ed., 1969) (discussing the inherent tradeoff between the ability of the state and federal governments to collect tax revenues); Liner, supra note 40, at 13 ("One of the central tenets of devolution is that the tax-paying capacity that once went to federal income taxes has now been released for states and localities to absorb."); cf. HY & WAUGH, supra note 65, at 31 (arguing that the reason local governments rely so heavily on property taxes is not because of their inherent appeal, but rather because federal and state taxing authorities have left property as a largely untapped source of revenue); Metcalf, supra note 205, at 60-61 (noting that during the 1980s [a period in which federal taxes on individual incomes were reduced] the states increasingly came to rely on personal income taxes for revenues); Werner W. Pommerehne, Quantitative Aspects of Federalism: A Study of Six Countries, in THE POLITICAL ECONOMY OF FISCAL FEDERALISM, supra note 85, at 275, 283 ("[In Canada o]ver the last decade, the federal government has substantially reduced its personal income tax and corporation income tax in order to make room for corresponding provincial taxes."). Here it is also worth recalling, as a caveat, the earlier discussion of the potential for a requisitions-induced shift away from income taxes and toward property taxes. See supra text accompanying notes 298-300 (noting that states have incentives to tax unmovable property, but that owners of that property may have equally strong incentives to challenge such taxation through the democratic process).
443. See David Brunori, State Personal Income Taxation in the Twenty-First Century, in THE FUTURE OF STATE TAXATION, supra note 61, at 191, 197, 203; Michael Mazerov et al., Federal Tax Restructuring and State and Local Governments: An Introduction to the Issues and the Literature, 33 SAN DIEGO L. REV. 1459, 1470 (1996) ("[S]tates rely extensively on federal audit and compliance programs for their own purposes and are reliant as well on federal information reporting and withholding rules for their own administration."). State tax enforcement authorities also share information with the federal government, see BREAK, supra note 144, at 36, thus lowering federal compliance costs somewhat. It is likely, however, that this relationship involves far more "take" than "give" for the states.
444. See David Brunori, State Personal Income Taxation in the Twenty-First Century, in THE FUTURE OF STATE TAXATION, supra note 61, at 191, 197, 203; Michael Mazerov et al., Federal Tax Restructuring and State and Local Governments: An Introduction to the Issues and the Literature, 33 SAN DIEGO L. REV. 1459, 1470 (1996) ("[S]tates rely extensively on federal audit and compliance programs for their own purposes and are reliant as well on federal information reporting and withholding rules for their own administration."). State tax enforcement authorities also share information with the federal government, see BREAK, supra note 144, at 36, thus lowering federal compliance costs somewhat. It is likely, however, that this relationship involves far more "take" than "give" for the states.
445. See David Brunori, State Personal Income Taxation in the Twenty-First Century, in THE FUTURE OF STATE TAXATION, supra note 61, at 191, 197, 203; Michael Mazerov et al., Federal Tax Restructuring and State and Local Governments: An Introduction to the Issues and the Literature, 33 SAN DIEGO L. REV. 1459, 1470 (1996) ("[S]tates rely extensively on federal audit and compliance programs for their own purposes and are reliant as well on federal information reporting and withholding rules for their own administration."). State tax enforcement authorities also share information with the federal government, see BREAK, supra note 144, at 36, thus lowering federal compliance costs somewhat. It is likely, however, that this relationship involves far more "take" than "give" for the states.
446. James Alm et al., The Relationship Between State and Federal Tax Audits, in EMPIRICAL FOUNDATIONS OF HOUSEHOLD TAXATION 235, 236 (Martin Feldstein & James M. Poterba eds., 1996).
447. See Harley T. Duncan, State Legislators and Tax Administrators: Can We Talk?, in THE UNFINISHED AGENDA FOR STATE TAX REFORM, supra note 63, at 83, 93 (describing the successes of various state programs).
448. Aim et al., supra note 327, at 237.
449. See id. at 236 ("[T]he states rely extensively on information provided by the IRS through its revenue agent reports (RARs) on federal audits and its CP2000 notices on federal reporting discrepancies identified through the Information Returns Program.").
450. See HELLERSTEIN & HELLERSTEIN, supra note 189, at 941-60.
451. See SHAVIRO, supra note 58, at 73. Some states simply have more non-residents who want to work in their states than residents who want to work in neighboring states. For example, New York state's labor pool draws heavily from New Jersey. By instituting a payroll or sales tax, New York could legitimately tax out-of-state residents. As long as in-state residents paid the same tax, the scheme would certainly withstand constitutional muster. See Commonwealth Edison Co. v. Montana, 453 U.S. 609, 617-18 (1981). New Jersey would have a more difficult time retaliating by using a seemingly neutral taxing mechanism because few New York residents work in New Jersey. See In re Speno, 319 N.E.2d 180 (N.Y. 1974) (discussing and adjudicating one such scheme). This effect could be self-reinforcing if the following scenario occurs: New York raises its payroll tax while lowering its income tax by a corresponding amount. The net result is a shift of the tax burden from residents to non-residents. That results in some New Jersey residents moving to New York in order to benefit from this burden shifting. This influx would, in turn, raise New York property values, providing a further economic benefit to New Yorkers.
452. See SHAVIRO, supra note 58, at 73. Some states simply have more non-residents who want to work in their states than residents who want to work in neighboring states. For example, New York state's labor pool draws heavily from New Jersey. By instituting a payroll or sales tax, New York could legitimately tax out-of-state residents. As long as in-state residents paid the same tax, the scheme would certainly withstand constitutional muster. See Commonwealth Edison Co. v. Montana, 453 U.S. 609, 617-18 (1981). New Jersey would have a more difficult time retaliating by using a seemingly neutral taxing mechanism because few New York residents work in New Jersey. See In re Speno, 319 N.E.2d 180 (N.Y. 1974) (discussing and adjudicating one such scheme). This effect could be self-reinforcing if the following scenario occurs: New York raises its payroll tax while lowering its income tax by a corresponding amount. The net result is a shift of the tax burden from residents to non-residents. That results in some New Jersey residents moving to New York in order to benefit from this burden shifting. This influx would, in turn, raise New York property values, providing a further economic benefit to New Yorkers.
453. See SHAVIRO, supra note 58, at 73. Some states simply have more non-residents who want to work in their states than residents who want to work in neighboring states. For example, New York state's labor pool draws heavily from New Jersey. By instituting a payroll or sales tax, New York could legitimately tax out-of-state residents. As long as in-state residents paid the same tax, the scheme would certainly withstand constitutional muster. See Commonwealth Edison Co. v. Montana, 453 U.S. 609, 617-18 (1981). New Jersey would have a more difficult time retaliating by using a seemingly neutral taxing mechanism because few New York residents work in New Jersey. See In re Speno, 319 N.E.2d 180 (N.Y. 1974) (discussing and adjudicating one such scheme). This effect could be self-reinforcing if the following scenario occurs: New York raises its payroll tax while lowering its income tax by a corresponding amount. The net result is a shift of the tax burden from residents to non-residents. That results in some New Jersey residents moving to New York in order to benefit from this burden shifting. This influx would, in turn, raise New York property values, providing a further economic benefit to New Yorkers.
454. In-state residents might complain that they too deserve pay raises commensurate with those of their out-of-state colleagues. Employers could disguise the out-of-state workers' pay raises as a "commuter subsidy," but then it would need to be paid to residents who commute from New York's far northern suburbs as well.
455. See supra note 332.
456. Cf. SELIGMAN, supra note 14, at 647 (addressing double-taxation problems under such circumstances); SHAVIRO, supra note 58, at 20, 21, 74 (discussing the potential for such double taxation).
457. Cf. SELIGMAN, supra note 14, at 647 (addressing double-taxation problems under such circumstances); SHAVIRO, supra note 58, at 20, 21, 74 (discussing the potential for such double taxation).
458. See SHAVIRO, supra note 58, at 9 (discussing this possibility).
459. Of course, that may say more about the uneasy normative case for a Tiebout world than anything else.
460. DONALD PHARES, WHO PAYS STATE AND LOCAL TAXES? 63 (1980).
461. See id. at 67 tbl.4-3.
462. See id. at 72.
463. See id. at 72 n.h.
464. See id. at 72 ("The greatest propensity for exportability is manifest by the corporation net income tax at an average of 43.7 percent; the high and low is between New York and Rhode Island at 51 percent and Pennsylvania at 38 percent.").
465. See infra notes 364-366 and accompanying text (describing how Congress could limit tax exporting using its Commerce Clause authority or financial incentives).
466. See RAIMONDO, supra note 102, at 190-92 (providing an overview on some of the debates).
467. See New York ex rel. Cohnv. Graves, 300 U.S. 308, 315 (1937).
468. See Travis v. Yale & Towne Mfg. Co., 252 U.S. 60, 80 (1920).
469. See Kathryn L. Moore, State and Local Taxation: When Will Congress Intervene?, 23 J. LEGIS. 171, 174 (1997).
470. See id. (comparing the Kentucky and California rules).
471. See Walter Hellerstein, Some Reflections on the State Taxation of a Nonresident's Personal Income, 72 MICH. L. REV. 1309, 1310 (1972).
472. See HELLERSTEIN & HELLERSTEIN, supra note 189, at 965-68 (discussing the fact that most states tax all income of residents, even if that requires double taxation of some income, and explaining the complex rules for determining a taxpayer's place of residence).
473. Daniel Shaviro notes that only half of all states have substantially enacted the Uniform Division of Income for Tax Purposes Act. See SHAVIRO, supra note 58, at 72 n. 13.
474. An interesting related question, which might well prompt federal action in the future, is how to apportion income by "telecommuters," who live in one state, but are "employed" in another, perhaps quite distant, state. As the United States enters an information-based economy, and the percentage of people so employed increases exponentially, some apportionment rule will have to be developed. Exclusive taxing authority for the state of residence seems like the rational answer, but vested interests could well defeat its enactment. After all, such a rule would likely benefit states such as Hawaii, California, Colorado, and Florida, at the expense of Northeastern and Rust Belt states. For a preliminary discussion, see Walter Hellerstein, Electronic Commerce and the Future of State Taxation, in THE FUTURE OF STATE TAXATION, supra note 61, at 207.
475. See Eisner, supra note 320, at 82-83 (discussing the problems of dislocations associated with such a transition); Alan Schenk, The Plethora of Consumption Tax Proposals: Putting the Value Added Tax, Flat Tax, Retail Sales Tax, and USA Tax into Perspective, 33 SAN DIEGO L. REV. 1281, 1317-26 (1996) (discussing the complexities involved in switching an economy from an income-tax based system to a consumption-tax based system).
476. See Eisner, supra note 320, at 82-83 (discussing the problems of dislocations associated with such a transition); Alan Schenk, The Plethora of Consumption Tax Proposals: Putting the Value Added Tax, Flat Tax, Retail Sales Tax, and USA Tax into Perspective, 33 SAN DIEGO L. REV. 1281, 1317-26 (1996) (discussing the complexities involved in switching an economy from an income-tax based system to a consumption-tax based system).
477. See Richard L. Doernberg, A Workable Flat Tax Consumption Tax, 70 IOWA L. REV. 425, 482-84 (1985); Robert E. Hall & Alvin Rabushka, Putting the Flat Tax into Action, in FAIRNESS AND EFFICIENCY IN THE FLAT TAX, supra note 320, at 3, 23-26.
478. See Richard L. Doernberg, A Workable Flat Tax Consumption Tax, 70 IOWA L. REV. 425, 482-84 (1985); Robert E. Hall & Alvin Rabushka, Putting the Flat Tax into Action, in FAIRNESS AND EFFICIENCY IN THE FLAT TAX, supra note 320, at 3, 23-26.
479. For an overview of the debate and its presumptive winners and losers, see Colette Fraley, States Guard Their Borders as Medicaid Talks Begin, CONG. Q. WKLY. REP., June 13, 1995, at 1637.
480. The battle's intensity might be stemmed somewhat if states do not act like pure rent seekers in trying to negotiate a formula. Public-spirited negotiations are not outside the realm of possibility, since public opinion polls have, in the past, shown broad support for federal redistribution from rich to poor states. See ADVISORY COMM'N ON INTERGOVERNMENTAL RELATIONS, CHANGING PUBLIC ATTITUDES ON GOVERNMENTS AND TAXES tbl. 12-1 (1983).
481. The Article assumes here that the Musgrave theory, not the Pauly counter-theory, remains the conventional wisdom.
482. This analysis by no means ignores the reality that a wealthy citizen has more clout and more access to government that a poor citizen.
483. Of course, this line of analysis depends on an assumption that income is normally distributed around each state's mean. If a rich state has a small number of extremely wealthy residents and a large number of poor residents, i.e. if there is a bipolar distribution of wealth, it could conceivably have a higher per capita income than a largely middle class state with few residents below the poverty line. But this complication can be essentially ignored since American states tend not to have bipolar wealth distributions. Louisiana has 26.4% of its residents living below the poverty line, which is the highest in the United States. The national average in 1993 was 15.1%. See U.S. DEP'T OF COMMERCE, supra note 51, at 482. Regional variations in wealth distribution are also minor. See id. at 476.
484. See supra text accompanying note 326.
485. See Steven Sheffrin, Should the Federal Income Tax Be Replaced with a National Sales Tax?, STATE TAX NOTES, Oct. 21, 1996, at 1147 (discussing the difficulties the states will encounter in collecting their income taxes if the federal income tax is replaced by a national sales tax).
486. The underlying assumption here is not that analysis will be more accurate when performed at the federal level, but that the analysis will be more accurate when performed by analysts working for politicians who have little or no vested interest in a favorable assessment of a given program.
487. See supra text accompanying note 341.
488. See generally Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981) (holding that a Montana coal tax that imposes 90% of its burden on out-of-state consumers of coal is not invalid under either the Commerce or Supremacy Clauses); Walter Hellerstein, Complementary Taxes as a Defense to Unconstitutional State Tax Discrimination, 39 TAX LAW. 405 (1986) (noting that the Supreme Court's expansive interpretation of the complementary tax doctrine has prevented the invalidation of many taxes that impose discriminatory burdens on out-of- state firms); Ferdinand P. Schoettle, Commerce Clause Challenges to State Taxes, 75 MINN. L. REV. 907 (1991) (arguing for more strenuous review under the Commerce Clause, based on the economic effects of the tax at issue).
489. See generally Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981) (holding that a Montana coal tax that imposes 90% of its burden on out-of-state consumers of coal is not invalid under either the Commerce or Supremacy Clauses); Walter Hellerstein, Complementary Taxes as a Defense to Unconstitutional State Tax Discrimination, 39 TAX LAW. 405 (1986) (noting that the Supreme Court's expansive interpretation of the complementary tax doctrine has prevented the invalidation of many taxes that impose discriminatory burdens on out-of-state firms); Ferdinand P. Schoettle, Commerce Clause Challenges to State Taxes, 75 MINN. L. REV. 907 (1991) (arguing for more strenuous review under the Commerce Clause, based on the economic effects of the tax at issue).
490. See generally Commonwealth Edison Co. v. Montana, 453 U.S. 609 (1981) (holding that a Montana coal tax that imposes 90% of its burden on out-of-state consumers of coal is not invalid under either the Commerce or Supremacy Clauses); Walter Hellerstein, Complementary Taxes as a Defense to Unconstitutional State Tax Discrimination, 39 TAX LAW. 405 (1986) (noting that the Supreme Court's expansive interpretation of the complementary tax doctrine has prevented the invalidation of many taxes that impose discriminatory burdens on out-of- state firms); Ferdinand P. Schoettle, Commerce Clause Challenges to State Taxes, 75 MINN. L. REV. 907 (1991) (arguing for more strenuous review under the Commerce Clause, based on the economic effects of the tax at issue).
491. The Supreme Court's recent Eleventh Amendment sovereign immunity jurisprudence, which began with Seminole Tribe v. Florida, 517 U.S. 44 (1996), has not re-considered whether Congress can abrogate one state's sovereign immunity against suits by another state. The Supreme Court has held that when they ratified the Constitution, the states waived their sovereign immunity in suits instituted by other states. See Virginia v. West Virginia, 206 U.S. 290, 319 (1907). But even if the Court continues its current trend toward expanding Eleventh Amendment protections by overruling Virginia, Congress could require any state seeking to participate in a requisitions program to waive its sovereign immunity in such suits.
492. The Supreme Court's recent Eleventh Amendment sovereign immunity jurisprudence, which began with Seminole Tribe v. Florida, 517 U.S. 44 (1996), has not re-considered whether Congress can abrogate one state's sovereign immunity against suits by another state. The Supreme Court has held that when they ratified the Constitution, the states waived their sovereign immunity in suits instituted by other states. See Virginia v. West Virginia, 206 U.S. 290, 319 (1907). But even if the Court continues its current trend toward expanding Eleventh Amendment protections by overruling Virginia, Congress could require any state seeking to participate in a requisitions program to waive its sovereign immunity in such suits.
493. See PHARES, supra note 338.
494. While intrastate mobility subsidies have been considered as a means of decreasing residential segregation by race, see Richard H. Sander, Comment, Individual Rights and Demographic Realities: The Problem of Fair Housing, 82 Nw U. L. REV. 874, 928-30 (1988), they have not been considered in the interstate context as a means of allowing U.S. citizens to find their way to their preferred states. Such a proposal is, in and of itself, adequate fodder fof another law review article. This Article shall only note the extent to which a federally funded program might help foster many of the communitarian benefits discussed supra Part III.
495. See, e.g., Kimel v. Florida Bd. of Regents, 120 S. Ct. 631 (2000) (holding that Congress's purported abrogation of state sovereign immunity in the ADEA exceeded its authority under § 5 of the Fourteenth Amendment); Alden v. Maine, 527 U.S. 706 (1999) (holding that Congress cannot abrogate states' sovereign immunity pursuant to its Article I power); College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (holding that constructive waiver of sovereign immunity by states is not valid); Printz v. United States, 521 U.S. 898 (1997) (holding the Brady Act provision requiring local police chiefs to conduct background checks on proposed handgun transfers unconstitutional); Seminole Tribe, 517 U.S. at 44 (holding that Congress has no power under the Indian Commerce Clause to abrogate state sovereign immunity); United States v. Lopez, 514 U.S. 549 (1995) (holding that the Gun Free School Zones Act of 1990, 18 U.S.C.S. 922(g)(1)(A), exceeds Congress's Commerce Clause authority).
496. See, e.g., Kimel v. Florida Bd. of Regents, 120 S. Ct. 631 (2000) (holding that Congress's purported abrogation of state sovereign immunity in the ADEA exceeded its authority under § 5 of the Fourteenth Amendment); Alden v. Maine, 527 U.S. 706 (1999) (holding that Congress cannot abrogate states' sovereign immunity pursuant to its Article I power); College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (holding that constructive waiver of sovereign immunity by states is not valid); Printz v. United States, 521 U.S. 898 (1997) (holding the Brady Act provision requiring local police chiefs to conduct background checks on proposed handgun transfers unconstitutional); Seminole Tribe, 517 U.S. at 44 (holding that Congress has no power under the Indian Commerce Clause to abrogate state sovereign immunity); United States v. Lopez, 514 U.S. 549 (1995) (holding that the Gun Free School Zones Act of 1990, 18 U.S.C.S. 922(g)(1)(A), exceeds Congress's Commerce Clause authority).
497. See, e.g., Kimel v. Florida Bd. of Regents, 120 S. Ct. 631 (2000) (holding that Congress's purported abrogation of state sovereign immunity in the ADEA exceeded its authority under § 5 of the Fourteenth Amendment); Alden v. Maine, 527 U.S. 706 (1999) (holding that Congress cannot abrogate states' sovereign immunity pursuant to its Article I power); College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (holding that constructive waiver of sovereign immunity by states is not valid); Printz
498. See, e.g., Kimel v. Florida Bd. of Regents, 120 S. Ct. 631 (2000) (holding that Congress's purported abrogation of state sovereign immunity in the ADEA exceeded its authority under § 5 of the Fourteenth Amendment); Alden v. Maine, 527 U.S. 706 (1999) (holding that Congress cannot abrogate states' sovereign immunity pursuant to its Article I power); College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (holding that constructive waiver of sovereign immunity by states is not valid); Printz v. United States, 521 U.S. 898 (1997) (holding the Brady Act provision requiring local police chiefs to conduct background checks on proposed handgun transfers unconstitutional); Seminole Tribe, 517 U.S. at 44 (holding that Congress has no power under the Indian Commerce Clause to abrogate state sovereign immunity); United States v. Lopez, 514 U.S. 549 (1995) (holding that the Gun Free School Zones Act of 1990, 18 U.S.C.S. 922(g)(1)(A), exceeds Congress's Commerce Clause authority).
499. See, e.g., Kimel v. Florida Bd. of Regents, 120 S. Ct. 631 (2000) (holding that Congress's purported abrogation of state sovereign immunity in the ADEA exceeded its authority under § 5 of the Fourteenth Amendment); Alden v. Maine, 527 U.S. 706 (1999) (holding that Congress cannot abrogate states' sovereign immunity pursuant to its Article I power); College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (holding that constructive waiver of sovereign immunity by states is not valid); Printz v. United States, 521 U.S. 898 (1997) (holding the Brady Act provision requiring local police chiefs to conduct background checks on proposed handgun transfers unconstitutional); Seminole Tribe, 517 U.S. at 44 (holding that Congress has no power under the Indian Commerce Clause to abrogate state sovereign immunity); United States v. Lopez, 514 U.S. 549 (1995) (holding that the Gun Free School Zones Act of 1990, 18 U.S.C.S. 922(g)(1)(A), exceeds Congress's Commerce Clause authority).
500. See, e.g., Kimel v. Florida Bd. of Regents, 120 S. Ct. 631 (2000) (holding that Congress's purported abrogation of state sovereign immunity in the ADEA exceeded its authority under § 5 of the Fourteenth Amendment); Alden v. Maine, 527 U.S. 706 (1999) (holding that Congress cannot abrogate states' sovereign immunity pursuant to its Article I power); College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense Bd., 527 U.S. 666 (1999) (holding that constructive waiver of sovereign immunity by states is not valid); Printz v. United States, 521 U.S. 898 (1997) (holding the Brady Act provision requiring local police chiefs to conduct background checks on proposed handgun transfers unconstitutional); Seminole Tribe, 517 U.S. at 44 (holding that Congress has no power under the Indian Commerce Clause to abrogate state sovereign immunity); United States v. Lopez, 514 U.S. 549 (1995) (holding that the Gun Free School Zones Act of 1990, 18 U.S.C.S. 922(g)(1)(A), exceeds Congress's Commerce Clause authority).
501. See generally Herbert Hovenkamp, Judicial Restraint and Constitutional Federalism: The Supreme Court's Lopez and Seminole Tribe Decisions, 96 COLUM. L. REV. 2213 (1996); Vicki C. Jackson, Seminole Tribe, The Eleventh Amendment, and the Potential Evisceration of Ex Parte Young, 72 N.Y.U. L. REV. 495 (1997); Henry Paul Monaghan, Comment, The Sovereign Immunity "Exception," 110 HARV. L. REV. 102 (1996); see also Seminole Tribe, 517 U.S. at 100, 110 n.8 (Souter, J., dissenting) (pointing to the clear consensus in pre-Seminole Tribe scholarship that had rejected the views the Court's majority was now embracing).
502. See generally Herbert Hovenkamp, Judicial Restraint and Constitutional Federalism: The Supreme Court's Lopez and Seminole Tribe Decisions, 96 COLUM. L. REV. 2213 (1996); Vicki C. Jackson, Seminole Tribe, The Eleventh Amendment, and the Potential Evisceration of Ex Parte Young, 72 N.Y.U. L. REV. 495 (1997); Henry Paul Monaghan, Comment, The Sovereign Immunity "Exception," 110 HARV. L. REV. 102 (1996); see also Seminole Tribe, 517 U.S. at 100, 110 n.8 (Souter, J., dissenting) (pointing to the clear consensus in pre-Seminole Tribe scholarship that had rejected the views the Court's majority was now embracing).
503. See generally Herbert Hovenkamp, Judicial Restraint and Constitutional Federalism: The Supreme Court's Lopez and Seminole Tribe Decisions, 96 COLUM. L. REV. 2213 (1996); Vicki C. Jackson, Seminole Tribe, The Eleventh Amendment, and the Potential Evisceration of Ex Parte Young, 72 N.Y.U. L. REV. 495 (1997); Henry Paul Monaghan, Comment, The Sovereign Immunity "Exception," 110 HARV. L. REV. 102 (1996); see also Seminole Tribe, 517 U.S. at 100, 110 n.8 (Souter, J., dissenting) (pointing to the clear consensus in pre-Seminole Tribe scholarship that had rejected the views the Court's majority was now embracing).
504. See generally Herbert Hovenkamp, Judicial Restraint and Constitutional Federalism: The Supreme Court's Lopez and Seminole Tribe Decisions, 96 COLUM. L. REV. 2213 (1996); Vicki C. Jackson, Seminole Tribe, The Eleventh Amendment, and the Potential Evisceration of Ex Parte Young, 72 N.Y.U. L. REV. 495 (1997); Henry Paul Monaghan, Comment, The Sovereign Immunity "Exception," 110 HARV. L. REV. 102 (1996); see also Seminole Tribe, 517 U.S. at 100, 110 n.8 (Souter, J., dissenting) (pointing to the clear consensus in pre-Seminole Tribe scholarship that had rejected the views the Court's majority was now embracing).
505. See Romer v. Evans, 517 U.S. 620, 634 (1996) (striking down a discriminatory state constitutional provision that raised an "inevitable inference that the disadvantage imposed is born of animosity toward" homosexuals). Justice Kennedy wrote the majority opinion in Romer that was joined by five Justices, including Justice O'Connor.
506. The dissenters in the Seminole Tribe line of cases have essentially made it clear that they will overturn that precedent if and when they obtain the fifth vote necessary to do so. In his dissent in Kimel, for example, Justice Stevens noted: Despite my respect for stare decisis, I am unwilling to accept Seminole Tribe as controlling precedent. First and foremost, the reasoning of that opinion is so profoundly mistaken and so fundamentally inconsistent with the Framers' conception of the constitutional order that it has forsaken any claim to the usual deference or respect owed to decisions of this Court. . . . The kind of judicial activism manifested in cases like Seminole Tribe . . . represents such a radical departure from the proper role of this Court that it should be opposed whenever the opportunity arises. Kimel, 120 S. Ct. at 650, 653-54 (Stevens, J., dissenting).