If what the state government is doing is useful and wanted, then the state should tax more and the federal government should tax less. This is yet another inefficiency of federal government to act as a middleman.
One of the roles of the federal government is to redistribute funds from states that have populations to tax to states that don't. It's difficult to "tax more", if there's no one to tax (e.g. Montana).
It's no coincidence that the most rural, most Republican states are massive consumers of federal funds (via farm subsidies and transportation subsidies, mainly) and the most urban, most Democratic states are net producers of federal funds.
> via farm subsidies and transportation subsidies, mainly
A transportation subsidy might be local (maybe - interstates are national, not local), but farm subsidies end up being distributed nationally since they basically just mean that certain types of food are cheaper than they otherwise might be. So you can't count farm subsidies as "consumers of federal funds".
(It's definitely an artificial distortion of the market, but that's a different argument.)
A transportation subsidy might be local (maybe - interstates are national, not local), but farm subsidies end up being distributed nationally since they basically just mean that certain types of food are cheaper than they otherwise might be. So you can't count farm subsidies as "consumers of federal funds".
I'm not sure how the conclusion follows from the premises. Farm subsidies do consume federal funds. Where do you think the funding for the massive pork-barrel farm bills comes from? Moreover, those dollars aren't necessarily passed on to consumers. In theory, the market for farm products is a perfectly competitive market and any subsidy to the market would result in cheaper prices for everyone. In practice, well, Cargill exists. Large agribusinesses are quite capable of taking subsidy rents and stashing them away as profit rather than using them to compete on prices if their market is more like a cartel and less like a perfectly competitive free market.
> Large agribusinesses are quite capable of taking subsidy rents and stashing them away as profit rather than using them to compete on prices if their market is more like a cartel and less like a perfectly competitive free market.
What does this have to do with a subsidy? You can do this identically without a subsidy (assuming you can do it at all). The subsidy just lowers the starting price.
State politicians and voters in state elections, particularly in states that are net beneficiaries of the federal contributions, are sure to like the idea.
It shouldn't be that hard right? I'm sure we can make those changes in a few days. We'll feed people idealism in the meantime until we have it all switched over.
