Basis For State Redistribution From Suburbs To Cities
Economies of agglomeration is the reason many U.S. state governments redistribute income from its affluent suburbs to poorer urban localities. This is often achieved through grants to local governments according to a criteria that favor low-income communities. Suburbanites benefit from this redistribution because many work and enjoy visiting city centers that would not be sustainable on their own tax revenues. Cities that can't afford to provide adequate fire and police protection or schools are not places where businesses will want to locate and thus cannot maximize the agglomeration effect.
Read more about this topic: Economies Of Agglomeration
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