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year administration of Governor Tom We calculate the incidence of the recent Kean (Republican), he confronted major changes to the New Jersey state tax system deficits and a court mandate to restrucon a sample of homeowners and conclude ture the state's assistance to local school that the policies redistribute wealth on av- systems. To deal with the first problem, erage from higher-income homeowners to- Governor Florio increased the state retail ward lower-income homeowners and from sales tax (through rate increases and base owners of suburban residential property broadening). His reaction to the second toward owners of urban and rural resi- problem was to implement a significant dential property. Even when there exist package of changes in the state's personal clear and significant general tendencies income tax, homeowner and tenant rein the effects of a policy on identifiable bate programs, grants to local governgroups, there remains considerable varz*- ments, including especially school disation among individuals within such tricts, and mandated local school groups. We distinguish between changes expenditure levels. In this paper we exdesigned to finance a given policy path and amine the incidence and some of the magenuine shifts in policy. The latter have jor allocation effects of these changes in incidence and allocation effects, the for- New Jersey's fiscal policy. mer do not. Our analysis differs from others, we think, in several respects. In the first place, in considering the incidence of the change

We calculate the incidence of recent changes to the New Jersey state tax system on a sample of homeowners. Our analysis distinguishes between business-as-usual responses to an evolving fiscal situation and tax changes that constitute a surprise. The latter have incidence effects; the former do not. We conclude that, if the changes carried out by NJ Governor Jim Florio are regarded as permanent, they effected a one-time wealth redistribution from, on average, higher-income homeowners toward lower-income homeowners and from owners of suburban residential property toward owners of urban residential property. Although effects on the averages for identifiable groups are clear and significant there is very considerable variation in the effects on individual homeowners within groups. We also estimate the allocation effects of the tax changes using a general equilibrium model that incorporates the option of in-and out migration. The results suggest that the changes will induce a sizable migration of weal thy and high-income people out of the state.

This article demonstrates the parallels between Bellamy's fictional society in Looking Backward and Schumpeter's socialist blueprint Capitalism, Socialism, and Democracy. The socialist system Joseph Schumpeter describes is nearly identical to that in Edward Bellamy's utopia. Because Bellamy's society is a concrete one set within the readable confines of a novel, it provides a useful benchmark for students analyzing Schumpeter.

Do the economic consequences of policies affect the political behavior of elected officials? In particular, do the costs and benefits that flow to households in legislative districts affect representatives' support of policy proposals? In recent years, scholars have investigated this question by regressing roll-call vote decisions of legislators against measures of the economic interests of constituents and the ideology of the legislators [3; 5; 8; 9; 10; 11; 13; 14]. With some exceptions, such as Peltzman [13], most scholars who perform such regressions conclude that constituents' economic interests are not the sole determinant of legislators' behavior. Representatives' own policy preferences explain some of the cross-sectional variance in their support of proposals. In the words of economists, representatives shirk from their constituents' interests. Many authors who regress roll-call vote behavior against measures of constituents' economic interests and representatives' ideology are aware that their measure of the latter (summary rollcall vote ratings by groups such as the Americans for Democratic Action (ADA)) is not a pure measure of representatives' policy beliefs because it is merely a summary of previous roll-call behavior. To eliminate the contamination, scholars regress the ADA rating against numerous economic, demographic, and regional variables. The unexplained residual variance is then used to measure representatives' ideology. Those who use this technique obviously hope that these residuals represent personal ideology and not other possible causes of vote decisions. The reasonableness of this assumption depends on whether the variables regressed against the ADA rating capture all the other causes of congressional behavior. Kalt and Zupan [9, 293; 10, 112], Carson and Oppenheimer [5, 172] and Kau and Rubin [11, 64] exclude three important classes of variables: the positions of interest groups and executive-branch actors, and the likelihood of proposal passage, all of which affect the decisions of legislators. This exclusion increases the probability that the residuals in the ADA equation represent not only the personal ideology of representatives, but also the ability of executive-branch and interest-group actors to affect reelection.'

This article considers the design of grants to offset fiscal disparities. We define afiscal disparity as a condition in which towns must levy a different tax rate in order to provide the same level of public services. We consider ways of measuring disparities, as well as ways of allocating grants to alleviate disparities. In order to focus the presentation, we concentrate on lump-sum grants for unrestricted use from a state government to general purpose local governments within that state. We conclude by presenting an example of a grants formula for the state of New Jersey which meets our specifications.