Speaker: Adam Myers, Providence College
Abstract: The taxation policies of the American states have historically been only weakly related to the partisan composition of state governments. Between 1990 and today, however, Republican-controlled and Democrat-controlled states diverged in their tax policies, with the former increasingly cutting their income taxes and the latter more tepidly raising them (especially for high income earners). The resulting polarization in state tax policy has had important implications for intergovernmental fiscal relations: as the Republican state-level tax-cutting agenda has increasingly undermined state fiscal capacity, pressure has built on the national government to intervene in state and local fiscal matters. Ironically, then, the Republican Party – the traditional champion of federalism and states’ rights – appears to have inadvertently paved the way for greater national involvement in state fiscal affairs. In this paper, I analyze how party polarization in state fiscal policy gradually developed over the course of the thirty-year period between 1990 and 2020. I then explore how the polarization of state tax policy has influenced fiscal federalism, with a particular focus on Congress’ decision to vastly increase intergovernmental spending during the COVID-19 pandemic.
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