While revenue sharing is not likely to eliminate state and local taxation since the tax effort factor subsidizes increased governmental growth, it does tend to eliminate what Madison saw as a distinctive feature of the U.S. form of government, a compound republic. This essay has discussed why local and state officials have conceded the principles of a compound republic to a monopoly form of government. Federal, state and local officials find it to their advantages to collude and operate in a monopoly environment rather than in a competitive environment.