A Radical New Interpretation of "Interstate Commerce"


In a case headed toward the Supreme Court's next session, a Sixth Circuit judge last September invalidated parts of Ohio's $280 million subsidy/tax break package to DaimlerChrysler, ruling that they amounted to an unconstitutional disruption of free trade between states. It's all part of a small but growing backlash against corporate welfare, according to this Wall Street Journal article:

An anti-incentives decision by the high court would have broader implications as well, potentially endangering incentives for projects such as factories and sports stadiums across the country. An attack on incentives could encourage states to shift to other financial inducements, such as direct cash grants.

If home-growing medical marijuana qualifies as "interstate commerce," then it's hard to see how trade-distoring giveaways do not; obviously, though, there is a political chasm between the two potentially addictive activities.

To protect states' authority to set incentives, two Republican lawmakers from Ohio, Sen. George Voinovich and Rep. Patrick Tiberi, last month introduced legislation to explicitly grant states the power to offer tax incentives for economic development. "The bill guarantees that we can keep using these tools to help grow our economy and put people to work," Mr. Voinovich said at the time.