61 Pages Posted: 4 Feb 2010
Date Written: February 2, 2010
Scholars have examined how inequality influences the development of different types of institutions. This article takes a historical perspective to examine how economic inequality and challenges to collective action may have contributed to different taxing and spending patterns of state and local governments in the United States. Particularly before the Great Depression, differences existed in the absolute and relative size of state and local governments, the use of various tax instruments to fund government operations, and the size and nature of spending programs. The evidence suggests that those areas with greater economic equality chose to acquire common goods and services collectively and to impose taxes to fund those expenditures at a greater relative level than areas with greater inequality. These patterns continued through World War II, and, to a much lesser extent, to the present day. This article also examines the substantial changes in the relative roles of local, state, and federal governments in assessing taxes and providing common goods and services.
Keywords: inequality and taxation, inequality and local governments
Suggested Citation: Suggested Citation
Zolt, Eric M., Inequality, Collective Action, and Taxing and Spending Patterns of State and Local Governments (February 2, 2010). Tax Law Review, Vol. 62, No. 04, 2009; UCLA School of Law, Law-Econ Research Paper No. 10-03. Available at SSRN: https://ssrn.com/abstract=1546766