You need to really look at “How the money flows”
objectively.
From payroll/cap gains etc taxes, to the feds, they mandate and mark it up because they need to spend it and the states take the money because they are cowards.
There are at least three points in which we can cut out this criminal middle man.
Historical, Conservatives/Republicans have targeted the front end and have played lip service to the middle. Lower taxes and less regulations.
I am suggesting that we/conservatives target the back-end, the recipients of the funds. The States that agree to their endless mandates in order to get federal funds.
How would the states make up the loss of revenue? Would the voters stand for it? The voters pay federal taxes and you want them not to get any of the money back. The states are hooked on the funds like an addict. Look at the Rep governors who elected to expand Medicaid under Obamacare. They did it for the money.
Some states get more back in federal revenue than they pay in taxes.