The Manhattan Institute’s Steven Malanga in City Journal has an article titled “The State Tax Grab” on how states — especially New York, New Jersey, California, Massachusetts and Michigan–have been extending their tax reach beyond all reasonable bounds. Here is one example, from New Jersey:
As Malanga points out, such tax-grabbing is probably prohibited by Article I, Section 8, Clause 3 of the Constitution giving Congress power to regulate interstate commerce. But small businesses socked with such taxes often choose to pay up rather than bear the expense of litigation. Congress could act to stop such tax-grabbing, but as Malanga shows it has been dithering instead.
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