Home > Tax Policy > The Failure of Localism

The Failure of Localism

In Mitch McConnell’s CNN interview with Candy Crowley, the Senate Minority Leader argued that the federal government shouldn’t send relief to states to prevent layoffs of policemen, firefighters, and teachers.

I certainly do approve of firefighters and police. The question is whether the federal government ought to be raising taxes on 300,000 small businesses in order to send money down to bail out states for whom firefighters and police work. They’re local and state employees. […] The question is whether the federal government can afford to be bailing out states. I think the answer is no.

Matthew Yglesias explains why the federal government can afford to help local and state employees keep their jobs.

At the moment for localities to raise funds to pay teachers and firemen is quite costly. Households and small firms are in a fragile state, and taxing then at higher rates to support public service could be very damaging. The federal government, by contrast, can currently borrow money at negative seven-year real rates.

Aside from McConnell being wrong about what the federal government can afford, the Kentucky Republican demonstrates a bias that’s worth challenging further. Local control of government has advantages, but as with other American dogmas, its enthusiasts overlook the downsides. When public services are locally funded, those services can only be as good as what the locality can afford. And since poor people both need more services and have less revenue for taxes, the services don’t match the needs of America’s most impoverished citizens – the system itself clarifies why we need the term “disadvantaged.”

In Edward Glaeser’s book, Triumph of the City, he points out the injustice of this system for cities.

Rich enclaves have often formed right outside of urban political boundaries, where the prosperous can be close to the city without having to pay its taxes or attend its schools. A level playing field means that people should be choosing where to live based on their desires for neighborhood or opportunity not based on where they can avoid paying for the poor. 

A nation’s poor are every citizen’s responsibility, not just the people who happen to live in the same political jurisdiction. It is fairer, both to the poor and to cities, if social services are funded at the national rather than the local level.

Maybe the firefighters, police, and teachers losing their jobs aren’t directly protecting McConnell or teaching his children, but the families affected by his preference for local spending will still suffer.

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