One of the beauties of living in a federalist system (one where states and the national government have separate powers) is that individual states can choose what they want to tax and how they want to spend it. Your state wants to spend 100% of it on building new amusement parks? It’s going to be one very fun state to live in, at least until you get hurt on a roller coaster and you’re wondering where all the hospitals have gone…
The federal government funds many of the social programs used by state citizens, but leaves things like education up to the discretion of individual states. We will first talk about what is taxed at the state level and then compare how different states choose to allocate their budgets.