No One Really Wants States’ Rights Because No One Really Wants Local Accountability

It’s that simple. States’ Rights advocates all over the country talk about how states have no authority or power and how the federal government has subsumed powers that do not properly belong to it in the Constitution.

But the most important piece of this discussion revolves around taxation, and it’s where even some of the most ardent states’ rights folks start to falter. I believe that the only way to return power to local governments is for local governments to be the only tax-collecting entities.

Consider the current system: the federal government taxes individuals directly for the lion’s share of the taxes they pay, then the federal government turns around and gives some of those taxes to state and local governments to carry out certain federal programs. Every state receives federal funds, particularly in the once Confederate and now completely dependent South, and all of those funds are collected by the federal government from individuals, then returned to state and local governments by paternal Washington.

So who becomes the bad guy in that scenario? The federal government. States’ rights folks can rail that we’re “Taxed Enough Already,” but their ire and their anger is always directed at the federal government. Here’s the thing, though. State and local governments could refuse to receive federal funding, but they never do. If anything, they fight for more and expanded federal funding. Washington must look on this situation with some degree of wry humor: the very state officials who take the money the IRS collects from individuals are criticizing the feds for taxing people too much and acting like some kind of champions of the people? That’s rich.

States love the current system because it makes them look like the good guys shrugging their shoulders at bad Uncle Sam, while Uncle Sam can collect as much as he wants. And here’s the kicker: since the taxes used for state and local programs are often collected from the feds, there is not very much local accountability over how those funds are used. The states can look like the low-taxing good guys, all the while enjoying accountability-free funding collected from their own citizens by the federal government:

What if, for example, a particular state can afford not to tax its residents at high rates because it receives disproportionately more funding from the federal government than states with apparently oppressive tax codes? That would change the narrative significantly, revealing federal dependence where bold, efficient stewardship was once thought to preside.

Here’s what a true states’ rights situation would look like. The federal government would get its taxes from the states. The states or counties would alone collect taxes from the people. The people would be angry with the states if the states were collecting too much. There would be a major incentive for people to oversee exactly how their local governments were using their money. People would get booted out of office if they weren’t pushing back harder on the federal government. The states would be fighting for smaller federal government programs so that they could keep more of the money they collected from the people.

In other words, their would be greater checks and balances, greater accountability, more freedom, and lower taxes. But obviously no one really wants any of that.