On Thursday I spoke at a panel at the Federalist Society’s National Convention entitled: Is Everyone for Federalism Now? The title is a backhanded tribute to the President. Finally, he is bringing us together, because he has caused the liberal resistance to Trump to appreciate federalism—a cornerstone of conservative thinking about constitution! But that is actually the shallower reason for the renewed interest in possible cross- ideological agreement on America’s most famous practical contribution to governance. The deeper reason is that a whole new school of law professors has embraced federalism under the new name of “national federalism.” Two of its most distinguished adherents, Heather Gerken and Abbe Gluck, were on this panel.
Count me a skeptic, however, about the prospect of any enduring alliance. To be sure, there may be tactical and opportunistic use of federalism by those who oppose the administration: that is the nature of politics particularly in Washington where for many politicians the meaning of the Constitution changes depending on whether they are in power. And there may be a few actual areas of rapprochement: it is conceivable, for instance, that some liberals may join conservatives in opposing commandeering of state officials.
But in general there will be no intellectual convergence because the right and left’s understanding of federalism—its content, origins and purposes—is very different. The right believes that federalism derives from a text of the Constitution that limits the power of the federal government, giving different responsibilities to federal and state officials. The purpose of this distribution of power is ultimately to protect individual liberty from government.
In contrast, progressives who promote federalism support a federalism that promotes activist government and exists largely at its sufferance—almost the opposite of constitutional federalism.
The total elimination of the deductibility of state and local taxes in the Senate Republican tax plan will cost me money, as I live in the high tax state of Illinois. Nevertheless, I strongly favor this proposal. It is rare that a change in tax law can reinforce the basic structure of our Constitution, but this one does.
Our Constitution is premised on government accountability and our federalism on competition among the states. Deductibility of state and local taxes undermines both. Because the deduction tempers the full force of the tax burden that states and localities impose, the accountability of state and local legislators for tax and spending becomes more attenuated. And this lack of responsibility is not ideologically neutral: state officials tax and spend more taxpayers’ money than they would if they could not slough off some of the costs on people who cannot vote them out of office.
Second, federalism is supposed to encourage competition among the states for efficient provision of public goods. But this deduction reduces the keenness of the competition.