Vanderbilt Law Review

First Page



So long as we have a federal system of government, a continuing problem, and certainly one of the most pressing, is that of an effective coordination of taxes. That problem has achieved paramount impor- tance in late years. Because of new and expanding conceptions as to what governments should do for people, our state governments are continually confronted with ever-increasing demands that they provide additional governmental functions and supply more governmental services. The resulting increase in governmental activities and extension of benefits mean urgent needs for additional revenue. As prices have spiraled under the increasing pressure of meeting our domestic and foreign civilian and military commitments, the revenue problem grows more acute. It is costing the states and local governments more money to do their existing jobs, to say nothing of shouldering additional responsibilities. From a total expenditure by state governments in 1944 of a little over $5 billion the amount has soared to a total of in excess of $24 billion in the fiscal year 1957- an increase of almost 500%. State tax collections have also risen constantly. Between 1944 and 1959 there was an increase from slightly over $4 billion to $15.8 billion, or an increase of upward of 400%. Local taxes total about the same amount as state taxes. That means that the states and their political subdivisions collected over $31.5 billion in fiscal 1959. The states have understandably persisted in their efforts to get some return for the benefits they have conferred upon all business transacted within their borders, whether it be local business or interstate operations.