-
Essay / American Federalism: Balancing National and State Values...
States across the country have been able to demonstrate and validate competitive federalism through various tax policies that are attractive to businesses. Recently, Toyota, one of the world's largest automakers, announced that it would move its massive California operations to Plano, Texas, largely for Texas' business infrastructure. Toyota will be eligible for $40 million in tax breaks through the Texas Enterprise Fund, as well as local tax incentives (LA Times, 2014). Texas along with other states such as Tennessee and Ohio are great examples of how states are able to generate more opportunities for their citizens when they have flexibility. Exclusively federal control could limit this flexibility, leading to stagnation of innovation and options for businesses. Moreover, it is this type of flexibility that allows states to be laboratories of democracy. For example, when Colorado and Washington took the initiative to legalize marijuana in 2012, it gave the rest of the country the opportunity to legalize marijuana.