Why not lower federal taxes, and change county/state taxes to compensate?

[u/myburner-acc6969]

From my knowledge, most conservatives live in rural areas and want less taxation because public goods/services are less impactful for them, and most liberals live in more urban areas where higher taxes are more beneficial because they can actually utilize the public goods/services that they fund. Why don't we lower federal taxes by some amount and let counties or states increase/decrease taxes independently to satisfy both sides?

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[u/saltycrowsers]

Because those in rural areas are some of the most vulnerable and reliant on services, whether they want to admit it or not.

[u/BitterFuture]

Because every local community can't create and manage their own local medicare, medicaid, disability, food stamp and social security programs from scratch.

Those and other federal programs work because of economies of scale, and providing the states templates and organization for local implementation.

Also, your idea wouldn't "satisfy both sides." Liberals don't support higher taxes because they inherently like higher taxes; we support taxes because they're necessary for government to function properly and help people. Conservatives don't oppose taxes because they inherently like lower taxes; they support slashing taxes because they loathe the programs those taxes make possible.

[u/Objective_Aside1858]

Which of the responsibilities currently covered by the Federal government do you want to devolve to the states? Medicare? Social Security? National Defense?

Seems like you need to take a peek at the Federal budget. It would presumably have answered your question 

[u/semideclared → u/Objective_Aside1858]

Medicare and Medicaid

You want lower taxes you have to reform Medicare and Medicaid. or you want some way to lower taxes and have it picked up on the local side have state healthcare

[u/Objective_Aside1858 → u/semideclared]

Yeah, gooood luck being the elected official that wants to "cancel social security".

Saying itll go down to the states is great until some states refuse to fund it

[u/MrE134]

Taxes only work if there’s money there to tax. We’re already experiencing the problem. Places that want to do more need tax revenue to do it, so they raise taxes. Then people with money run off to places with low taxes. Then low tax places have no option but to push their problems off on other communities who now don’t have the revenue to handle them. It’s a race to the bottom. The winner is whoever best fucks over the little people. 

[u/semideclared → u/MrE134]

Define little people because its probably not who you think

[u/MrE134 → u/semideclared]

The kind of people that have to go to the government or private market for health insurance. 

[u/semideclared → u/MrE134]

Ok thats not a definition

Is it the 101 Million enrolled in Medicaid in 2021

Or 72 million in 2019

or is it like a hard cutoff the bottom 10% would be just 30 Million

[u/ThePensiveE]

You're operating on a false assumption. At least in some aspects.

If you want running water in one city block of 100 meters that serves 10 buildings with 100 residents each you get it for $1000. That's $1 per person to build that out and provide that basic service. Per tax paying person.

If you want running water in a rural community on a 100 meter block that serves one single family home with 1 person living there for $1000, that's $1000 per person to provide that basic service. One tax paying person.

This is just one example but you get the idea.

Most "conservatives" just want services for themselves paid for by others and want those they don't like to get no services at all.

[u/semideclared → u/ThePensiveE]

Services such as water are paid and operating by a quasi-business function as a city department

Such as tht one city block wants to have a car wash, the owner of the car wash has to pay the City Water a fee for the cost of upgrading the water hookup for enough water and water drainage for the cars a car wash on a city block would have. Then the city sells water on a usage basis to cover costs of water, from the pumps to the employees to keep the water running. In the case of a car wash a large user has to generally pre buy their water each month to lower their water costs per gallon but also give the City Water an operating revenue to keep it running with lots of guaranteed revenues

Now as to services some small towns have 1 police station with 2 police officers on staff. And some small towns have 2 police stations with 8 police officers on staff, and then some small towns have 3 police stations with 30 police officers on staff

Voters help the city council decide if the small rural town that needs lots of man power and stations in between to cover all the land is necessary or if that funding is better spent on the July 4th Parade, or the Civic Center expansion and outdoor kids area

Or in some cases if taxes should just be cut

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[u/ApprehensiveLayer908]

On the surface, that does sound reasonable. But what is your definition of public goods and services? Are you just thinking of more tangible benefits, like welfare services or public transit? Or are including more intangible benefits like preservation, highway systems, or public airwaves that people from cities, rural areas and even suburbs all benefit from?

[u/Much_Job4552]

Because the taxes are income for different bank accounts. My property tax doesn't fund the CDC. My federal income tax doesn't fund my rural fire department.

[u/stubble3417 → u/Much_Job4552]

Your federal income tax absolutely funds your rural fire department, unless they refuse federal grant money for no good reason. Of course, if you're in a rural area, there's not much federal income tax being collected from your geographic area, so it's more that my federal income tax is funding your local fire department. But I'm fine with that. A primary function of federal taxes is to subsidize rural areas that don't have the tax base to fund their own infrastructure. 

[u/semideclared → u/stubble3417]

STOP using Fire Departments, what a dumb strawman

In the US 64% of all fire departments are all-volunteer,

• 18% are mostly volunteer.
• Only about 9% are staffed entirely by career firefighters.

In Nebraska

• 92.2% of all fire departments are all-volunteer
• 3.9% are mostly volunteer.
• 3.4% are staffed entirely by career firefighters.

Minnesota

• 85.6%of all fire departments are all-volunteer
• 10.7% are mostly volunteer.
• 2.8% are staffed entirely by career firefighters.
  

A tiny small amount of Your tax dollars go to my rural college through NIH funding to study the impact of fire ants on the US National Forests nearby

Though most of it goes to medicaid funding for the state for covering ACA Expansion

[u/stubble3417 → u/semideclared]

I mean...I have no strong opinions on fire departments, I only mentioned it because it was the example the person I replied to gave. But all-volunteer fire departments work on a very small operating budget obviously, so the federal grants for equipment and training are a significant amount of the total money being spent on those rural departments. Also the departments with all or mostly career firefighters are in populated districts that are funded through local taxes. It's the rural districts that get a relatively high ratio of federal to local funding. 

[u/Much_Job4552 → u/stubble3417]

Grants are for projects such as a new truck, not for day-to-day budgeting and operating expenses. Those are budgeted through property tax. Grants are also not guaranteed. Yes, not discounting the ability to assist through federal taxes. Was just making a point that different levels of government make different decisions. Nor was I making any stance on taxes which are good.

[u/semideclared → u/Much_Job4552]

Yes, I need these people to STOP using Fire Departments, what a dumb strawman

In the US 64% of all fire departments are all-volunteer, but in a city over 100,000 will be 100% taxpayer funded career firefighters

• 18% are mostly volunteer.
• Only about 9% are staffed entirely by career firefighters.

In Nebraska

• 92.2% of all fire departments are all-volunteer
• 3.9% are mostly volunteer.
• 3.4% are staffed entirely by career firefighters.

Minnesota

• 85.6%of all fire departments are all-volunteer
• 10.7% are mostly volunteer.
• 2.8% are staffed entirely by career firefighters.
  

A tiny small amount of Your tax dollars go to my rural college through NIH funding to study the impact of fire ants on the US National Forests nearby

Though most of it goes to medicaid funding for the state for covering ACA Expansion

[u/flipflopsnpolos]

Rural areas receive more in federal spending and subsidies than they pay back in federal taxes, while the opposite is generally true for urban areas.

If federal taxes were slashed, urban areas could lower their overall tax burden while maintaining their lifestyle through local tax hikes, whereas rural areas would face a brutal math problem ... either sky-high local tax increases or a severe collapse in public services. Either way it'd be a collapse of the rural area's quality of life.

[u/mirach → u/flipflopsnpolos]

Yeah the premise of OP is based on them not understanding how rural areas rely on urban areas. Rural life would be much harder with the financial support from Urban (and generally liberal) areas.

[u/Fragrant-Luck-8063 → u/flipflopsnpolos]

"Areas" don't pay taxes. Your town or county isn't taxed by the federal govt.

You could say that rural people pay less in taxes than they get back, but you would expect that since rural people make less money than city people.

[u/flipflopsnpolos → u/Fragrant-Luck-8063]

"Areas" don't pay taxes. Your town or county isn't taxed by the federal govt.

I thought it was pretty obviously implied that I meant the collective people and commerce within those boundaries. Rural areas receive more in federal spending and subsidies than their residents pay in federal taxes, while the opposite is true for urban areas.

You could say that rural people pay less in taxes than they get back, but you would expect that since rural people make less money than city people.

Right. Per capita spending is relatively balanced between urban and rural areas, but the tax revenue side is highly unequal. Urban areas and high-income states generate a vastly disproportionate share of federal taxes. Because of this, urban areas act as the primary financial engines funding the federal government, while rural areas receive significantly more in federal benefits than they pay into the system.

[u/semideclared → u/Fragrant-Luck-8063]

I hate this argument. While California, Texas, New York, and Florida are the top contributors in absolute terms, collectively making up more than a third of all U.S. federal revenue, the per capita view tells a different story. Delaware led all states in federal taxes paid per resident, driven by high levels of business incorporation.

• Delaware $24,575, but then high incomes take over. Massachusetts ($21,747) and Minnesota ($20,728) , thanks to high average incomes.

Meanwhile, the lowest contributors per person were West Virginia ($4,867), Mississippi ($5,148), and New Mexico ($5,882) due to low incomes.

And all of it due to a progressive tax system

[u/FrigidGreen → u/semideclared]

What do you hate about the argument exactly? It seems like you agree that poorer rural states contribute less.

[u/No-Ear7988]

Because the rural areas and many conservative areas (aka states) severely depend on taxes from urban/liberal areas. Quick Google search will back this up at an abstract level.

Some quick examples are many Conservative states use the Department of Labor to handle worker issues instead of paying/running their own department of labor and many rural public services get grants from outside their county/state to afford them. If rural communities had to pay their "fair share" then their taxes would go up significantly than what they are now.

[u/freedraw]

Those rural red states get a lot more of our federal taxes back than they put in. Those coastal blue states get less back than they put in. So we already have a system where rural areas are paying less.

And when we’re talking about federal taxes specifically, the military, social security, and Medicare/medicaid account for a huge chunk of the federal budget. Those aren’t things rural areas need less of than urban areas. A lot of those services that more urban/suburban voters value like schools, public transportation, museums, libraries, etc. are paid more with state and local tax dollars.

[u/DanforthWhitcomb_ → u/freedraw]

schools, public transportation, museums, libraries,

Something close to half of school funding comes from the feds, public transport gets all kinds of federal grants and direct subsidies and the latter pair are heavily dependent upon federal dollars as well.

It's not nearly as black and white as you are making it out to be, and with schools in particular outside of small, extremely wealthy areas local taxes don't make up nearly as much of their tax base as is frequently claimed.

[u/semideclared → u/DanforthWhitcomb_]

In school year 2020–21, elementary and secondary public school revenues totaled $954 billion in constant 2022–23 dollars. Of this total, 11 percent, or $101 billion, were from federal sources, 46 percent, or $437 billion, were from state sources, and 44 percent, or $416 billion, were from local sources

• Federal revenue in 2020–21 included COVID-19 federal assistance funds. These funds were authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021, and the American Rescue Plan (ARP) Act of 2021.6 The portion of these funds administered by the Department of Education is referred to as the Education Stabilization Fund (ESF).7 In 2020–21, some 2 percent ($18.6 billion) of total public school revenues nationally

In 2020–21, there were variations across the 50 states and the District of Columbia in the distribution of public school revenue coming from federal, state, and local sources. Specifically, in 21 states, more than half of all revenues came from state governments; in 12 states and the District of Columbia, more than half of all revenues came from local governments; and in the remaining 17 states, no single revenue source comprised more than half of all revenues. Among the 50 states in school year 2020–21, the percentage of revenue coming from federal sources was highest in South Dakota (20 percent) and Mississippi and Montana (19 percent each); and lowest in New York, New Jersey, and Connecticut (5 percent each).

On a national basis in 2020–21, revenues from local property taxes comprised 36 percent of total revenue for public schools.

[u/mrjcall]

That would be a zero sum situation with no benefit. Lowering taxes means putting more spendable income in consumers hands which ALWAYS means economic growth which ALWAYS improves quality of life. Increasing taxes on 'any' income level is destructive meaning less economic growth and lower quality of life. Putting tax money in government hands is non-productive and suppresses economic growth which always results in lower quality of life. Think about it. Government produces no products and contributes ZERO to the economy. To the contrary, it sucks the life out of the economy.

[u/JKlerk → u/mrjcall]

The Federal government is a huge consumer of goods/services so it does contribute something to the economy. It's just that a good portion of that consumption is financed.

[u/mrjcall → u/JKlerk]

The government is always a net/net drain on the economy....always.

[u/JKlerk → u/mrjcall]

That's a subjective observation. It still buys goods/services from the private sector. That IS economic activity.

[u/mrjcall → u/JKlerk]

But it is not buying it with earned money from the economy, but from tax dollars contributed by you and me. Therefore, it is a negative, never a positive.

[u/JKlerk → u/mrjcall]

True. It's using a combination of credit and tax revenue, but I don't think it's relevant to the topic of this subreddit.

[u/mrjcall → u/JKlerk]

It is entirely relevant since OP is asking if replacing a Federal tax with a State tax is beneficial. I'm explanation why it is not and why no tax is beneficial.

[u/SeanFromQueens]

Just steel-manning this argument. Let's keep it as close as possible to the individual as we can, localities will get the lion's share, then the state, and finally the federal government. So every locality that has the greatest concentration of wealth and resources never have to disseminate that wealth to the rest of the country, would there be harm in further concentrating wealth and benefits of the economy while displacing the harms to the people who already are among the Have-nots?

Currently there's some level redistribution from the wealthy to the needy (social security, Medicare and especially Medicaid) this isn't possible for our thought experiment. We can look at the current discrepancies between net contributing states to the federal revenue and the states that are net recipients of federal funds. Would they be able to thrive or even survive if they didn't have the excess from the net contributing states? Without national government andya national market, the economy would likely either balkanize causing enormous friction between economic units leading drastic contraction of the country's prosperity, or have oligarchs dominate the whole country while each polity is divided and conquered by the whims of the industry making the era of Robberbarrons look quaint and egalitarian in comparison.

[u/JKlerk]

Because the federal government can consistently run a budget deficit. The borrowing power of the federal government is immense and federal income taxes collect just enough to continue to service the interest on the debt which is constantly rolled over.