They found a nice workaround with federal taxation though. There's a lot of instances where the states technically have the power to pass different laws than what's federally blessed. However, they'll lose federal funding if they do. And the majority of the time, that's just not a good trade-off.

So the federal government is essentially taxing the state's citizens, then giving some amount of it back to the states in exchange for rowing the boat in the right direction. States that increase their own taxes to compensate for refusal of federal funds would become noncompetitive to other states who don't.