A country, a state of other jurisdiction which imposes high taxes on the rich may induce some of its residents to move away, and induce poor people to move into the jurisdiction in search of the redistributive benefits. In a federation in which migration is free between jurisdictions, such migration would appear to limit the ability of individual jurisdictions to redistribute income. The problem may generate a "race to the bottom", with each jurisdiction attempting to attract rich residents by taxing them at a lower rate than other jurisdictions do, generating an equilibrium in which no jurisdiction imposes redistributive taxes. Despite this theoretical possibility, we see governments engaged in large redistribution. This holds especially for the member states in the European Union, but also for the states in the United States. Furthermore, even municipalities effectively redistribute resources in the form of the provision of public goods targeted to low-income groups. Migration may be limited for several reasons: people may face a cost of moving; some people may prefer to live in one locality rather than another; property values may decline in response to higher taxes, thereby reducing the incentives to move. We examine the last two effects. In particular, we suppose that good locations are scarce in any jurisdiction: people who want to live near the beach or on the top of a mountain with a gorgeous view will find such locations limited. As both taxes and amenity values of different locations are capitalized in land value and rents, the presence of different types of locations may create scope for a wider redistribution than a standard theory of fiscal federalism would predict. |  |