Federalism/ˈfedərəlɪzəm/ Definition 1 of 3Pro Tip 1/3Government Layers Federalism involves layers - national on top, states or provinces below. In federalism, both the national and state governments collect taxes. Pro Tip 2/3Shared Power Power is not only divided but also shared between different levels. Under federalism, education policy is often a shared responsibility. Pro Tip 3/3Cultural Diversity Federalism allows different regions to maintain unique cultural identities. Federalism supports diverse language policies across various states.