Revenue Magic

The great Nixon decentralization revolution, sending federal revenues back to the states, is continuing to be unwound. President Bush is shifting more and more of the funding burden to the states, which means less federal revenues for education and other local-based services. Most states and localities have had to raise taxes to compensate for these changes. It's a bit like a magic trick. Cut taxes at the federal level and force localities and states to raise taxes. On the other hand, they could just stop providing all those non-essential services, like public schools.