Will States Restrain the Federal Government? February 15, 2009Posted by federalist in Federalism, Taxation.
The United States Constitution reserves all powers, not explicitly delegated to the federal government, to the states and the people. Since each state is a sovereign entity, why do they tolerate such an enormous federal government?
A state government has real incentives to resist the encroachment of the federal government: Every dollar that the feds take in taxes is a dollar that the state can no longer use for its political purposes. The feds can take that money and redistribute it for the benefit of other states. Or the feds can use it as a “carrot,” only remitting the tax revenue to states when they comply with the wishes of the feds. Either way, federal taxation takes power away from the states. But the Constitution clearly gives states the authority to retain this power, except insofar as the federal government is spending it on a very limited set of enumerated activities.
If there was any doubt before, the recent “bailout” plans show the federal government plainly exceeding its enumerated powers. Mark Sanford, Governor of South Carolina, is asserting that point, and suggesting that his state should not take any of this money.
The Pennsylvania state legislature is also considering a resolution that would “put the federal government on notice,” and serve as a preamble to repealing all extra-constitutional federal laws and taxes.
So long as the federal government is taxing and spending outside of its enumerated powers, the states would be justified in nullifying the taxation and prosecution of their citizens. It would be quite easy for a state like South Carolina or Pennsylvania to simply announce that it is indemnifying its citizens against the claims of the IRS. If the federal government threatened to send agents into a state to forcibly collect unjust taxes or imprison citizens who did not pay them, the state could not only call out its sheriffs and militia to defend its citizens, but it could also appeal to other states or countries for assistance in maintaining its sovereignty. If the federal government tried to impound assets held outside of that state, the state could seize the assets of the federal government or its beneficiaries for recompense.
In practice, because the states are in fact sovereign entities, and because the federal government is in fact constitutionally restrained, it is likely that the mere assertion of a state’s rights would be sufficient to put the federal government back in line. Governor Sanford: It only takes one state to start!
Addendum: California could easily extract itself from its present financial crisis in this manner. Governor Schwarzenegger just has to tell Californians, “Pay your taxes to California. We’ll take care of the feds.” If its taxpayers remanded even half of their federal taxes to the state instead, California would take in roughly $150 billion extra per year. Its current budget is roughly $100 billion per year, and its current deficit is less than $20 billion, which would leave the state with ample cash to make up for extra-constitutional federal services it wants to continue, to pay any constitutional taxes owed to the federal government (which would primarily be an apportionment for national defense), and to fight any attempts by the federal government to infringe its sovereignty. Since California is such a nanny state to begin with it wouldn’t have to scramble to build government infrastructure to collect these additional taxes and provide “essential” government services. And wouldn’t every citizen there jump at the opportunity to cut their tax burden and shore up their state in the process?
There could be a big first-mover advantage to this, since the first state to cut federal taxes will enjoy a rapid influx of industry and productive citizens looking for a break.
[See Dave Nalle’s 17Feb update on these efforts across the union.]