678 HARVARD LAW REVIEW in any of the cases of specific taxes that have come before the court, including the excises of Massachusetts and Virginia on foreign corporations. But there is no telUng what concerns have been prevented by those taxes from coming in to take small, isolated contracts. Now that the states are assured that they may tax the income from all business done within the state, whether that busi- ness is local commerce or interstate commerce, there is no further excuse for any form of specific taxes for a general fiscal purpose. Through an income tax, the state may tax interstate as well as local commerce. This bears on the question of the reasonableness of specific taxes so long as the states choose to continue them. All that is subject to such a tax in strict legal theory is the local busi- ness. But we should not infer from this that the tax becomes an invalid regulation of interstate commerce as soon as it is dispro- portionate to the local business. The interstate commerce is tax- able, if the state goes about it in the right way. It may reach it by valuing property by a capitalization of earnings from its use, by imposing a gross-receipts tax in lieu of other taxes, and by levying a tax on net incomes. So also it should be allowed to reach it by specific taxes on local business, provided those taxes are not other- wise improper. The test of the reasonableness of any form of specific tax should be the relation of the amount demanded, not to the legal res which is formally the subject of taxation, but to the economic interest which in the hght of all the decisions is actually liable for its proportional contribution to the state fisc. {To be concluded.) Thomas Reed Powell. CoLtniBiA University.
