Tax Day Proposal - Let the States Fund the More Perfect Union

Back when we beat them British there at Yorktown the American nation was a confederation of former colonies each operating under sovereign governments of their own.  The original “gang of” (being 13, obviously) came together first under the Articles of Confederation then later with the Constitution that we know today (or should I say some of us know today . . . present administration, many members of Congress, and several Supreme Court Justices excluded) to form the union of the United States of America.  In these days of the all powerful Federal Government we Constitutionalists should be stressing, among many other things, that the States founded the federal government.  Our states are not provinces or regional districts ultimately answerable to a federal power.  The states are sovereign entities that have collectively bargained (sometimes you gotta put in a way that Democrats can understand!) to create a common central government to coordinate issues on behalf of all the states that individual states cannot effectively accomplish on their own (e.g. national defense, interstate commerce, foreign treaties & trade policies, oversee currency, etc.).

Original Intent – Quick History Review

As myself and many others have stated before in this space, the Constitution grants the federal government only those powers expressed in the document.  All other implied powers are reserved to the states and the people.  The Constitution does give Congress the power to levy tariffs and taxes, and therefore a federal income tax is not unconstitutional per se.  However, I’m also a big original intent guy, and its clear from reading the Federalist papers, the debates over the Constitution, and various private writings from the Framers that they believed the Central Government should be the most removed and have the least influence over the everyday lives of citizens.

Today we’ve allowed the Federal Government to slowly but surely creep into our day-to-day existence to such a degree that we practically can’t make a move without dealing with some federal tax, federal regulation, or federal subsidy.  Through direct payments to the Federal Government in the form of individual income taxes, corporate taxes (what a joke), and payroll taxes, the individual is directly connected to the federal apparatus in a way I don’t believe the Framers intended, wanted, or would in any way shape or form approve of.  If we conservatives really want the Federal Government off our backs the way that we say we do, then we have to fundamentally change the way that we relate to our government.  We have to force the federal government to be more removed, more distant, and have less impact in the daily lives of the citizenry. So where do we start?  In honor of taxday, let’s being with how exactly this monstrosity is funded.

Block Grant Funding of the Fed

Rep. Paul Ryan is catching a lot of flack from conservatives and liberals alike about his proposed budget for the upcoming fiscal year.  One of the aspects that conservatives have cheered and liberals have jeered is the change in Medicare funding – going from direct Federal payments to a block-grant system, giving the states a pre-determined amount of cash and let the states decide how best to spend it on Medicare recipients. Let’s take this “block grant” notion regarding federal funding, and flip it around. In essence, fund the Federal Government with block grants awarded from the states.


Well, think about it.  The states collectively the Federal Government, so shouldn’t it be left to the states to make sure it has the operating capital to perform its Constitutional duties?  Under this system, We The People pay no direct federal tax . . . no income tax, gasoline tax, corporate tax, nothing, nada, zilch.  Additionally, states take no federal money for education, non-interstate transportation, healthcare, or other essential functions like paying farmers to, uh, not farm.  Without these huge payouts to states, the Federal Government would be left to provide for the common defense (national defense), promote the general welfare (manage Social Security, ensure a fair market environment through regulating anti-competitive practices), and conduct foreign affairs on behalf of the United States, and regulate Interstate commerce.  Does any of this sound familiar, like we’re read it somewhere before?

Probably through Constitutional Amendment, the states would collectively agree (if we keep using the word ‘collective’ we can probably get some Dems on board . . . at least Bernie Sanders) to fund the central government according to a formula of census data – share of population, per capita wealth/income, percentage of services used, etc.  At that point, it is up to the individual states and the politicians in those states to decide how best to raise those funds.  The likely outcome is competition among the states.  Maybe it works better for Arkansas to raise funds through income taxes.  Maybe in Maine its property taxes.  California can tax all the head shops, you get the drift.  Seriously, this competition among states will likely result in each state acting more in the interest of its citizens.  And since we don’t live in a great utopia like Libya and actually freedom of movement, people and businesses will naturally migrate to areas of the country which suit their own needs.  An equilibrium will be reached, the clouds will part, the Honey Badger will lay down with the Cobra (warning, probably NSFW due to language), and all things will be right with the world.

Representation without Taxation

Seriously, there will be problems with this system, just as there would be with anything man-made.  And transitioning to something like this would be gradual and deliberate.  But I do think it is more in line with the founding principles of this country, and more Constitutionally correct that the seizure of property (wealth) that is the contemporary progressive income tax system.  And let’s not forget that, just in time to celebrate taxday ’11, we hear today that over one-half of households don’t pay income tax.  So much for the system working better if everybody’s got “skin in the game,” huh?  Plumb on that one some, Joe.

Let us not forget the great and cynical quote of Benjamin Franklin, when asked, “Well, Doctor, what have we got, a Republic or a Monarchy?”

“A Republic, if you can keep it,” responded Mr. Franklin.

Is Republic is representative democracy, where individuals are elected to create and uphold policy that helps institute principles that are grounded in a Law of the Land.  In a Republic, neither the majority of the minority has the opportunity to vote themselves advantages at the expense of the other.  However, when the minority starts carrying the load, you had better watch out.  A majority that is represented and is not sharing in the burden is on that slippery slope to mob rule.  And that would be losing the Republic.

In reality, just about anything would be better than this regressive-progressive-punitive federal tax system we have today.  Yes, I would favor a flat tax.  I’m not a big fan of the “fair tax” because of its economic repercussions, but I still believe that would be better than what we have now.  But in the end, I think implementing state funding of the central apparatus would bring our system of federalism back in balance, remove the oppression of central government from the backs of our citizens, and make those politicians with whom we have a more direct influence more accountable to the people.

Hopefully this journal will generate some discussion.  This is a topic I’ve really wanted to get out in the national conscious for some time.

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