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The Tax Assignment Problem: Ruminations on How Theory and Practice Depend on History


  • McLure, Charles E. Jr.


This paper discusses how the theory and the practice of tax assignment--which level of government should tax what, and how--depend on history. It describes the meaning and methods of tax assignment, reviews implications of Musgrave’s three-branch view of public finance, notes the importance of accretions to knowledge--of the technology of taxation and of the economic effects of taxation, speculates about how economic evolution affects the conventional wisdom on tax assignment, identifies questionable tax assignments found in various federations that are legacies of history, and emphasizes the danger of assuming "one size fits all" in tax assignment.

Suggested Citation

  • McLure, Charles E. Jr., 2001. "The Tax Assignment Problem: Ruminations on How Theory and Practice Depend on History," National Tax Journal, National Tax Association;National Tax Journal, vol. 54(2), pages 339-364, June.
  • Handle: RePEc:ntj:journl:v:54:y:2001:i:2:p:339-64

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    Cited by:

    1. Sharma, Chanchal Kumar, 2010. "Beyond Gaps and Imbalances: Re-Structuring the Debate on Intergovernmental Fiscal Relations," MPRA Paper 32145, University Library of Munich, Germany.
    2. Jorge Martinez-Vazquez & Cristian Sepúlveda, 2007. "The Municipal Transfer System in Nicaragua:Evaluation and Proposals for Reform," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0708, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Rocabado Mejía, Carlos, 2006. "La Asignación Tributaria en Bolivia," Documentos de trabajo 7/2006, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    4. Boadway, Robin & Tremblay, Jean-François, 2012. "Reassessment of the Tiebout model," Journal of Public Economics, Elsevier, vol. 96(11), pages 1063-1078.
    5. Luca Gandullia, 2012. "The role of direct taxes in fiscal decentralization," DEP - series of economic working papers 6/2012, University of Genoa, Research Doctorate in Public Economics.
    6. Jorge Martínez-Vázquez, 2008. "Revenue Assignments in the Practice of Fiscal Decentralization," Chapters,in: Fiscal Federalism and Political Decentralization, chapter 2 Edward Elgar Publishing.
    7. Mare, Mauro, 2015. "Why and How should the EU budget be reformed?," MPRA Paper 76112, University Library of Munich, Germany.
    8. Jiří Čermák & Martin Gürtler, 2014. "Influence of Criteria of Built-up Areas in the Village to the Total Share of Municipalities on Shared Taxes," Acta Universitatis Bohemiae Meridionales, University of South Bohemia in Ceske Budejovice, vol. 17(1), pages 43-59.
    9. Margit Schratzenstaller & Bernd Berghuber, 2006. "Alternative Financing Sources for the EU Budget," WIFO Monatsberichte (monthly reports), WIFO, vol. 79(12), pages 893-910, December.

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