by Joseph F. Zimmerman. Albany, New York: State University of New York Press, 2007. 284pp. Hardcover. $75.00. ISBN: 9780791472057.

Reviewed by Robert M. Howard, Department of Political Science, Georgia State University. Email: polrmh [at]


The late Senator Russell B. Long of Louisiana, longtime chair of the Senate Finance Committee, summarized his scorn for tax reform legislation with his famous saying “Don’t take me, don’t tax thee, tax the fellow behind the tree.” Senator Long realized that voters care little for tax reform unless it actually reduces or eliminates their personal tax burden. Thus a Congress dependent upon votes for reelection casts revenue enhancement measures as tax reform and the mantra of tax reform is “revenue neutral.” This sounds better than saying you voted for a tax increase. Long understood that tax reform is merely one way for Congress to raise the necessary government revenue by reallocating the tax burden among various groups, presumably by taxing the fellow behind the tree, and thus limiting adverse electoral consequences.

The same dilemma confronts state legislatures. States are dependent upon, and in our federalist system, in competition with each other, for tax revenue. The problem is that voters do not like to pay taxes. The New York State legislature cares about New York voters and the Connecticut state legislature cares about Connecticut voters. Raising the tax burden on their constituents can lead to a very short legislative career. However, in a federal system, state legislatures do have the ability lower the tax burden on their constituents and still raise revenue. They actually can, and do, tax the fellow behind the tree. The New York legislature can tax the people and businesses of Connecticut and other states, while the Connecticut legislature can tax New Yorkers and the residents and business of the other states.

However, while this might be good for the careers of the various state legislators, these taxing schemes possibly violate the United States Constitution by, among other things, violating the privileges and immunities clause of the 14th Amendment or the Interstate Commerce Clause. Even if constitutionally permissible, these taxes might harm the economy and the good of the country by leading to unnecessary interstate competition, increasing the cost of doing business and harming market efficiency. It was this potential for interstate conflict and subsequent damage to the national interest that led to the abandonment of the Articles of Confederation and the adoption of the United States Constitution. Of paramount importance was the ability given to Congress to regulate commerce among the several states and the Indian tribes.

When businesses, individuals and states conflict over these taxes, they often resort to litigation by suing the taxing state in federal or state court. Because of this, the courts have often ruled on the constitutionality of these “interstate” taxes and have formulated or abandoned [*74] rules, such as the original package doctrine, and developed the constitutional doctrine known as the dormant or negative commerce clause. However, despite the development of these rules and doctrines, courts are ill-equipped to regulate state taxing schemes due to the lack of comprehensive knowledge and expertise and the inability to offer anything other than a piecemeal, incremental approach. The national institution designed by the framers to address these interstate schemes is the Congress.

The problem is that Congress has usually failed to act in this area. It is the “Silence of Congress” that is the concern of this book by Joseph Zimmerman. In careful, methodical fashion, Zimmerman reviews the various schemes used by states to increase tax revenue without increasing the tax burden on its own citizens, corporations and domiciliaries. Each chapter provides a comprehensive overview and explanation of the various taxing schemes, reviews the relevant case law and documents the (mostly lack of) congressional response.

As a starting point, Zimmerman introduces the reader to the concept of Adam Smith’s four famous tax maxims – to wit, taxes should (1) fall equally on each taxpayer, (2) be certain and not arbitrary, (3) be convenient in terms of payment, and (4) be economical to collect. Zimmerman amends maxim one to allow for progressivity, and then proceeds to show how most state taxing schemes fail on one or more of these maxims. For example, after the introductory chapter, Chapter Two examines excise and documentary taxes. Excise taxes are levies on such commodities as cigarettes and alcohol, while documentary taxes tax the issuance or transfer of stock, bonds real property and insurance. Excise taxes in particular create incentives for smuggling from one state to another, and the Congress has the authority to assist the states but to date has done very little.

Chapters Three and Four evaluate severance taxes which are taxes on natural resources, and non-resident income taxes, such as a commuter tax. States rich in natural resources like coal, natural gas and oil increase the cost of providing these commodities to consumers in other states and shift the tax burden to non domiciliaries. One could reasonably argue that energy resources are a national concern with implications for the energy security of the nation. The courts have declined to find that these taxes represent an undue burden on commerce, but several rulings suggest that Congress can and should legislate in this area.

Zimmerman continues this examination in the ensuing chapters with analyses of corporate income taxation, escheat (unclaimed) property, estates of multi-state resident decedents, and even gambling and filmmaking. He shows how this interstate competition for tax revenue damages the national interest and leads to situations that the framers sought to correct by discarding the Articles of Confederation in favor of the Constitution that includes the all-important commerce clause. However, for the most part, Congress has failed to act to remedy these conflicting tax schemes.

In the final chapters Zimmerman posits his goals and solutions. Chapter Seven, “The Silence of Congress,” reviews the few attempts by Congress to regulate interstate taxation and offers seven specific recommendations. Most of the recommendations suggest much greater [*75] congressional oversight and involvement in interstate taxation. The recommendations range from applying uniform taxation rules to establishing upper limits on severance taxes, to greater involvement by the federal government to prevent smuggling. These would bring state tax measures into compliance with Adam Smith’s four maxims, reduce market inefficiency and harmful interstate competition and support the national interest.

It sounds great in theory, but the problem, as Zimmerman acknowledges, is that Congress has never enacted the type of comprehensive legislation for which he argues and is very unlikely to do so in the future. It appears that Congress is quite content to let the courts hash out the interstate tax problems in its piecemeal and haphazard fashion. Members of Congress, after all, represent the various states, and many have designs on running for statewide office. It is better to “tax the fellow behind the tree.”

However, all is not lost. Zimmerman argues that the most realistic chance for change is cooperation through interstate compacts, uniform laws and administrative agreements. Interstate compacts have been reached in many areas, and a nation-wide movement for uniformity in laws is on-going. In particular, if major states such as New York and California support such uniformity, Zimmerman believes that more states would enter these compacts and agreements. There appears to be little empirical evidence to support this or other of his propositions, however. One of the few empirical studies cited by Zimmerman did not test this concept, known as diffusion, and, of the few variables tested, only political culture appeared to account for the adoption of uniform laws. Thus the author and reader can only speculate as to the value, or likelihood of adoption, of the proposed solutions.

While the topic of interstate taxation might appear dry to many, the implications on paychecks, state coffers and economic growth and development are all too real and important. The book is generally quite readable, even if at times the reader feels like one is attending a class lecture that is running too long. Given the organization of the book, the reader can often skip several of the middle sections of each chapter reviewing the history of the tax and various related court rulings. They are not necessary for understanding the gist of Zimmerman’s argument.

I think the book is most useful as a supplementary reading. The lack of empirical data and analysis would limit its usefulness in many social science courses, and unless there is additional empirical study the reader is left to speculate along with the author as the to causes of uniformity. However, the book would help law and graduate students in Constitutional Law and Tax classes and act as primer for instructors, whether for graduate or undergraduate courses. The middle sections of each chapter, although not necessary to following the narrative, provide a nice review and summary of relevant congressional and court action.

© Copyright 2008 by the author, Robert M. Howard.