Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and the Yahoo Answers website is now in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.

Why don't US states raise their own taxes instead of expecting a handout from the federal government?

Many states in the USA are going bankrupt, and they need tax revenue for schools, welfare, and first responders to name a few of their deficits.

5 Answers

  • Anonymous
    9 years ago
    Favorite Answer

    Because a lot of the federal tax revenues extracted from a state's residents comes back in the form of that kind of supplemental income, but with federal policy strings attached.

    So we really could have smaller federal spending and taxes and let states increase their own taxes to compensate, without them becoming owned by the federal government.

  • 9 years ago

    Not sure you asked the question correctly as the states do raise their own taxes. However, right along with those taxes are federal taxes that are collected from state employees (both private and government) and certain sales taxes, that's why states have the right to receive money back from the federal government, it's their money in the first place.

    The United States Federal Government collects around 2.5 trillion dollars a year in taxes paid by it's citizens, and then borrows another 1.5 trillion (approx) to make ends meet. If they were not obligated to give some of those dollars back, you could almost make a sure bet they would use it for political gain, give it to a special interest or worse pay some country that doesn't like us 2 billion dollars a year to pretend to be our friend.

    Just so you know those states that are in financial trouble, could have money problems no matter how much they had, some (probably most) elected officials simply don't have good sense when it comes to fiscal responsibility. They (politicians) have been robing the bank for so long they appear to not understand the word broke! however let one individual complain they are not getting their fair share and back to the bank goes the politician for another entitlement give away whether we can afford it or not. I think the last report was 47 million people on welfare and growing, that's where the lions share of our taxes go.

  • Anonymous
    9 years ago

    Both State and Government take taxes ( they don't ask ) form the citizenry. They get the revenue from us, the taxpayer's. They don't make any product they just regulate and incarcerate those who do. " We The People " are not just empty words. It is all one big vicious circle that needs to be addressed and resolved as far as what the Constitution plainly spells out. But as long as we the people stay focused on america's got talent and not the issue's that really affect us the politician's keep slicing up into smaller portions all of our freedoms. No party has the answer, they work for us, there are more of us than them and they a scared for the day when we realize this truth.

  • Well, they do. it's not working out so well either because the more revenue a government has coming in the more it spends, and it always spends more than it gets.

    Source(s): . Gork
  • Anonymous
    9 years ago

    Ask the republican legislators, and Grover Norquest.

Still have questions? Get your answers by asking now.