The tax assignment problem: Ruminations on how theory and practice depend on history

This paper discusses how the theory and the practice of tax assignment-whic h level of government should tax what, and how-depend on history. It descri bes the meaning and methods of tax assignment, reviews implications of Musg rave's three-branch view of public finance, notes the importance of accreti ons to knowledge-of the technology of taxation and of the economic effects of taxation, speculates about how economic evolution affects the convention al wisdom on tax assignment, identifies questionable tax assignments found in various federations that are legacies of history, and emphasizes the dan ger of assuming "one size fits all" in tax assignment.