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The article discusses U.S. federal legislation concerning corporate taxation and free trade between the states. The constitutionality of interstate commercial taxation has been tested in the Supreme Court, including the Georgia test case, Stockham Valves & Fittings, Inc., and the Minnesota case, Northwestern States Portland Cement Co., which were considered as a single case. Topics include the outlook for an apportionment formula that can be used to tax corporate income in all states, the court's decision in the Georgia and Minnesota cases, levies on out-of-state mail order houses and income from sales or services, and the issue of state rights.

This article discusses problems associated with the extension of the jurisdictional base of corporation income taxes in U.S. states. The article also discusses alterations in allocation formulas, threats to make corporations throughout the United States subject to taxation on their net income by many more states, and corporations suddenly presented with an income tax assessment in states where they have been merely been selling goods. Charts are also presented in the article, which illustrate the characteristics of corporate net income taxes of 34 states and the District of Columbia and the degree of concentration of property, payrolls, and sales in 25 manufacturing companies.

One may now summarize the discussion presented in series on public finance and advance suggestions for a financial policy to be pursued by a social state, not only in the present emergency, but also under circumstances likely to develop in the future. It should be understood at the outset that no reduction in the emergency expenditures of the federal government can be considered until there is ample evidence of the capacity of private industry to employ more workers and when that evidence is available, the reduction should be arrived out gradually, according to a prepared plan.

Because of the existence of the notion that individuals spend money more wisely than do public authorities, public finance has tended to be strictly limited in its functions, it has been regarded as little more than a supplementary agent of private enterprise. The state has been expected to employ public funds for the protection of life and property and for furnishing only those services which individuals could not reasonably hope to enjoy through private enterprise. The major part of the total national income has been deliberately left to be spent privately. In spite of these conceptions, public finance has been continually expanding as the functions of the state have developed. To the strictly protective functions of the laissez faire state, there have been added in the course of time a great many constructive social and economic functions aiming at a correction of some of the most obvious shortcomings of the processes of production and distribution of wealth under private management. This increasing intervention of the state in the economic sphere has been observed in some countries since the World War, and has been practically universal since the beginning of the present crisis. The amount of intervention has varied, in some states it has extended to the point where a substantial control over the operation of industry is involved.