Federalism is the division of power between the U.S. federal government and the individual states. This system allows both levels to govern effectively while preventing either from becoming too powerful.

States have authority over many local matters, such as transportation laws. While the federal government can set broad safety standards, states decide the details—an example of how federalism gives local governments flexibility within a national framework.

The Constitution grants the federal government the exclusive power to coin and regulate money. This prevents economic confusion that would arise if states issued their own currencies, reinforcing the federal government’s role in national economic stability.

Both state and federal governments have the authority to collect taxes. These shared, or “concurrent,” powers demonstrate how the federal system allows both levels of government to function cooperatively while maintaining separate responsibilities.

Found in Article VI of the Constitution, the Supremacy Clause establishes that when state and federal laws conflict, federal law prevails. This ensures national consistency while still allowing states significant autonomy within their own spheres of authority.