The Annual Monaco Yacht Show occurred recently, and if you already knew that, you should consider paying the estate tax. As I was reading about the show and its picturesque setting, I wondered what it would be like to live in Monaco. If Tiebout's assumptions all held, many people (perhaps including myself) would move there. But they haven't, so they don't. Let's see why:
1. Perfect mobility. Tell that to my couch.
2. Perfect knowledge. Monaco is pretty in the pictures I've seen of it. But do I know the details of their taxation system? Their public services and regulations? Their freedoms and law? The answer comes readily when I note that I know little of those things for the city in which I have always lived.
Skipping to 4. No employment restrictions. In case I got sick of the job search here in the USA, Monaco has preemptively made it nearly impossible for me to work within its borders. Back to LinkedIn it is...
5. No externalities to Revenue Expenditure Patterns. Monaco does not fund its own defense, but instead relies implicitly and explicitly on its friends and neighbors. Being surrounded by Europe has its advantages.
