What if US states could self-govern—just like EU countries do?
What if the federal government managed international trade, our national currency, and our military strategy, but states had the sovereignty to manage literally everything else?
That’s how it’s supposed to work, and it does to some extent. But, as I’ve mentioned in previous essays, even though US states have the authority to self-govern, they don’t have the money to do so. The vast majority of our tax dollars go to the federal government, not the states.
Of US annual tax revenues, 64% goes to the federal government, 21% goes to state governments, and 15% goes to local governments. This gives the federal government a lot of power to determine who gets what, while limiting how states and local governments can govern their own communities by choosing where those dollars go.
Who gets US tax revenue?
So I was curious: What if our tax dollars primarily went to the states—with a much smaller portion going to the federal government? What if the states had the full authority and the full budget to govern the way they wanted to? And what if that went into effect today?
What would happen?
Well, many blue states would probably become social democracies. They would raise taxes and offer universal healthcare, childcare, and education. They’d let immigrants in and grow their economies because of the influx of workers. They’d regulate capitalism even more, but they’d probably invest in science and technology and build green cities powered by renewable energy. They’d probably have good public transportation systems with high-speed railways connecting cities.
Many red states would probably reduce income taxes. They’d take a free market approach to capitalism and get rid of unions altogether. They wouldn’t have a lot of social services and individuals would have the freedom to decide what they want. The public school system would be replaced by charter schools. Laws might be driven by Christian values, and people could have guns and drive a motorcycle without a helmet.
Of course, it would vary by state. I live in Utah, which might be a red state, but it would let in as many immigrants as possible. It would probably have universal healthcare, childcare, and education (at least for community college). It would probably build Salt Lake City into the next solarpunk city and build new cities—like Telosa—along the I-15 corridor. Maybe we’d even develop a hut system in the Uintas to rival the Alps (a girl can dream).
And different states might have different needs. Hawaii might restrict who can buy land there—just like the Cook Islands do—or even make most of it public lands. Perhaps some states would eliminate private property altogether. Maybe others would replace income tax with sales tax or a land-value tax. Some states might trial a universal basic income or a 30-hour workweek.
Some states might sound like utopias to you, others probably don’t. But with the borders open between states (just as they are now), as a US citizen you could move to whichever one you want (or an NGO could help you do it). And what would happen then? Over time, the places that are good places to live will thrive, and the places that aren’t as good of places to live will depopulate—or have to adapt to attract more citizens.
For instance: What would happen if one state had universal basic income and another didn’t? Would families move where there is free childcare? Would students move where there is free education? Would businesses move to free-market states and unions move to regulated ones? Perhaps wealthy entrepreneurs would prefer to move to a red state for the lower taxes, but maybe their workers would prefer to move to a blue state for the free healthcare—and what would happen then?
We already do this to some extent—my parents moved to Oregon because the state pays for my special needs brother to have a caregiver 50 hours per week, and that has drastically bettered their lives. There are already many who choose to move to lower-tax states and companies like Tesla have already relocated to take advantage of freer and less regulated markets. Would we do this even more if states had full sovereignty—and more importantly, full fiscal authority—to self-govern?
I’m not suggesting we should do this—but as the war between Democrats and Republicans rages, the idea is echoed enough that it’s worth the thought experiment. “Shouldn’t we just be two separate countries?” Americans on both sides of the aisle ask in exasperation. And I’m kind of curious: what if we were? Because we have two very different groups of people requesting two very different ways of life. In fact, we probably have 50 different groups requesting 50 different ways of life. And what if we could all have it?
Americans have always preferred their local and state governments to the federal government. According to Pew Research, 66% of Americans view their local governments favorably, 54% view their state governments favorably, and only 32% view the federal government favorably. As government gets bigger, we tend to trust it less with the finer details of our lives. But as government gets smaller, we are much more happy to do so. So why not give more of the authority and the money to our local governments to manage as they see fit?
Why can’t we all have our respective utopias?
After all, it might be very difficult for Republicans and Democrats to agree at the federal level, but it’s not so difficult at the state level—75% of Republicans living in Republican states view their state governments favorably, and 70% of Democrats living in Democrat states view their state governments favorably. (The reverse is also true, nearly the same amount of Democrats dislike living in Republican states and the same amount of Republicans dislike living in Democrat states.)
If Democrats are happy in Democrat states, and Republicans are happy in Republican states, why should we try to enact legislation at the federal level that is favorable to one or the other? It just makes both parties unhappy. And it’s not as if one is necessarily better than another—there are pros and cons to both blue and red states. Even with the limited powers they currently possess, we know that housing is more affordable in red states but household income is higher in blue states. Blue cities have more job growth but red states have more population growth. Homelessness is more prevalent in blue cities but red cities have more gun deaths and maternal mortality.
This is not a new debate. In fact, it’s one we’ve been waging since the very beginning of the United States when we were just thirteen colonies that were entirely self-governing. And not at all anxious to unite.