That is actually an interesting thing to ponder (what would happen if there were no direct federal taxes). Instead, taxes would be funneled through local or st

That is actually an interesting thing to ponder (what would happen if there were no direct federal taxes). Instead, taxes would be funneled through local or state governments, which would be responsible for contributing some amount of that to the federal government. Local governments could then tweak who, what and how much they tax in order to attract business. Policy might also become less homogeneous across cities and states because the federal government would have less money to hold over the heads of local policy makers. But maybe not...just thinking out loud here...