We are one nation. If a particular region is doing well we expect that region to help the rest of the nation. If oil & gas revenues are flowing in a particular region then we as a nation (partially) share in that bounty. Later when the oil & gas runs dry the rest of the nation reciprocates.
That’s the share-the-wealth concept behind municipal grants.
I earlier proposed a confederated tax scheme where states collect Federal taxes on behalf of their residents using alternate taxes. Individuals calculate their Federal taxes using the Federal tax code and the state pays the tax on behalf of their residents using, for example, a tax on oil & gas revenues.
Begs the question as to the appropriate Federal tax code under a confederated tax scheme. How should we collect Federal taxes so as to more equitably share-the-wealth, promoting the ‘one nation’ ideal?
The data may surprise you.