Taxation and migration in a federal system

This paper discusses how taxation may affect migration, economic efficiency and income distribution. The institutional framework is a federal system, in which local authorities are responsible for the supply of public service s and the financing of these services, and where the central authorities ar e in charge of income redistribution. The main conclusion is that a moderat e policy of income redistribution is associated with greater centralization of the work force and greater economic inefficiency than is the case with both radical and more limited policies of redistribution.