By establishing a division and a relationship of equality between the national and state governments, federalism places restraints on the authority of the central government. The state governments have the ability to enact their own laws managing local matters, but the federal government has some capabilities that allow it to make significant choices.
It is necessary for the two different levels of government to coordinate their efforts. While the federal government addresses issues that affect the whole country, state governments focus on more localised and less significant problems. The national government is restricted from using certain powers by Article I, Section 8 of the Constitution of the United States of America. These powers include the ability to collect taxes, manufacture currency, and declare war. The 10th Amendment gives the states all powers that have not been delegated to the federal government or those are expressly prohibited to the states. For instance, states are able to charge their own unique taxes and are responsible for the management of both highways and schools under the authority of their own statutes.