Pd. Enrich, SAVING THE STATES FROM THEMSELVES - COMMERCE CLAUSE CONSTRAINTS ON STATE-TAX INCENTIVES FOR BUSINESS, Harvard law review, 110(2), 1996, pp. 377-468
Presently, the states are engaged in intense interstate competition fo
r economic activity by providing tax incentives businesses to locate i
n-state. In this Article, Professor Enrich argues that these state loc
ation incentives harm the slates and their citizens, and that the Comm
erce Clause may Present the only possible realistic restraint on this
''second Civil War.'' Although the Supreme Court has long employed the
dormant commerce clause to strike down state regulations that discrim
inate against out-of-state economic actors, the clause has trot been w
ed to curb the stales' attempts to influence business location decisio
ns through the use of tax incentives. Professor Enrich asserts that th
is dichotomy is not intrinsic to the clause itself but is attributable
, in part, to the interests of the particular parties who have litigat
ed Commerce Clause disputes. Upon examining the motives and judicial s
tanding of the potential litigants, he concludes that the states thems
elves ave viable candidates to bring constitutional challenges to stat
e location incentives. Professor Enrich contends that the Supreme Cour
t's Commerce Clause case law, which focuses extensively on discriminat
ory aspects of state taxation, provides a solid basis for constitution
al attacks upon many common forms of business tax breaks. He argues, h
owever, that the Court must reframe its analysis of discriminatory sta
te taxation in order to evaluate sensibly the full range of slate loca
tion incentives. He proposes an antidistortion standard, which would j
udge whether a state tax incentive violates the Commerce Clause by ass
essing whether that incentive distorts economic decisionmaking concern
ing the location of business activity. By refocusing its jurisprudence
, the Court can end the harmful consequences of state competition for
businesses and reassert the primacy of the Commerce Clause as a protec
tor of a robust national economy and a healthy federalism.