State-local tax policies to encourage growth and development have been roundly criticized as detrimental to social welfare. In response, recent proposals have included delimiting the ability of states and localities to fashion tax policies. Not only are such proposals unworkable, but they fail...

This article advances the proposition that general business taxation should be structured to recover the costs of public services rendered to the business community. Estimates of one possible form of such a tax structure are offered for states of the Seventh District and for other U.S. regions.