Periodically, it is proposed that the federal government reduce its role in intergovernmental fiscal relations by eliminating
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Periodically, it is proposed that the federal government reduce its role in intergovernmental fiscal relations by eliminating a number of smaller matching intergovernmental grants and simultaneously reducing federal taxes by an equal amount, particularly any that directly finance these grants. This concept is sometimes referred to as “revenue turnbacks,” the idea being that individuals will retain the resources and states the option to tax those resources to continue the programs now financed by the grants. If such a change were made, how do you expect states would respond? Do you expect that state spending on the aided categories could rise or fall if states had to finance that spending from the additional private resources?
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