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.

Argues that equalization policies have been advocated on the grounds of efficiency and equity. A case can be made for a policy to assist governments with constituencies that are disproportionately poor.

On April 4, 2007, the Federal Reserve Bank of Chicago, the National Tax Association, and the University of Illinois’s Institute of Government and Public Affairs brought together a distinguished group of state tax experts to discuss emerging trends in business taxation.