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Federalism on Steroids

July 20, 2012 by Amity Shlaes

Kevin Hassett, a coauthor of our burning hot 4% Solution, book #771 on Amazon as I type, mooted a cool idea at our Tax Summit this spring at the New-York Historical Society. It is to let the states collect the federal income tax, and let them choose how to do so. Federalism on steroids. Here is my Bloomberg column of this morning on that. Amar Bhidé wrote in to ask an interesting question. Which states are currently net recipients from the federal government and which net givers? There are some old studies on this, which posit Red States are getters, and Blue States givers. Bhidé asks whether all the bailouts have altered that picture, so that the Great Blue State is a big net receiver. The Tax Foundation has a strong but non-new chart on how the states rank here: the study could use an update. TF is on the hunt for funds; this project deserves them.