Mobility can make it difficult for a local jurisdiction to raise revenue because taxpayers can move to a nearby jurisdiction with lower taxes, creating a "race to the bottom" for taxes. This can create a reliance on property taxes, which are not affected by mobility, as a stable source of revenue. Therefore, both options (b) and (c) are correct.

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Mobility

Question 31

Multiple Choice

Mobility:

A) is not essential to the Tiebout model.
B) can hamper a jurisdiction's ability to raise revenues.
C) may be part of the reason for the reliance on local property taxes for the raising of local government revenue.
D) both (b) and (c) are correct.

Correct Answer: