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Fiscal Fragmentation and the Distribution of Metropolitan Area Resources: A Case Study

Federal Trade Commission, Washington, DC, 20580, USA

This paper estimates the incidence of local taxes and expenditures and the distribution of income in metropolitan Washington, DC, under our current fragmented system of governing metropolitan areas and under a hypothetical metropolitan-wide regime. The purpose of this exercise is to consider how the distribution of metropolitan resources might differ had society evolved toward a unified form of metropolitan governance. It is found that tax and expenditure incidence and the distribution of income are strikingly similar under both systems. From an equity perspective, neither the current fragmented system nor a unified system emerges as a clearly superior form of metropolitan organisation.

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