I just posted about the continued need for SOME federal taxation. We were talking about how we could possibly phase out Social Security and Medicare and also handle other federal obligations.
HOWEVER. The amount of federal taxes needed to do this would be miniscule compared to what we are paying now, not only for skyrocketing entitlements, but for Honey Bee Research in Indiana and doggie poop bag boxes at parks in Alabama. Read: PORK.
If we greatly decreased federal taxes to the amount necessary to fund a limited, proper federal government, and also required all further taxes to be state or local, there would be an incredible resurgence in America.
Second, there WOULD be federal taxation, but it would be derived, or "billed" as it were, to the states. How to divvy those taxes up equitably between the states is a matter for a separate discussion.
Finally, I agree wholeheartedly with your desire for a return to Federalism and its incumbent state's powers. My very grave concern is that it is virtually impossible with nearly half the population supporting a diametrically opposite viewpoint of the role of government. In several generations, education MIGHT be able to counter some of this thinking, but when the other side controls education, how is one to even start making those inroads...before time runs out.