IN the post-war period two factors which have hitherto been in the background have moved forward to the front of the stage. One is the cost of national defence, the indefinite continuance of which at a high level makes it essential for the federal governments to have first claim on the most productive sources of revenue. The other is the need for government action to maintain a high level of employment, now recognized by the federal governments in all three countries. Acceptance of this responsibility carries with it the need for planning counter-cyclical measures such as tax reductions and carefully timed public works programs, and this provides another reason for federal control of direct taxation.
These factors, combined with an increased emphasis on the desirability of achieving national minimum standards in some social services, have led to important developments in all three federations. In Canada and Australia the federal governments have sought to continue their war-time monopoly of income tax on a permanent basis: in Canada by a scheme of voluntary agreements with the provinces which has been increasingly successful, and in Australia by federal legislation which left the states no option but which has created some problems of its own, as yet unsolved. In the United States the federal government has always taken the lion's share of income-tax revenues, and in this respect there has been no change. Since the war, however, the special problems of the poorer states have been recognized by Congress, and there has developed an important new movement for the payment of variable grants designed to help the poorer states to raise the standard of some of their social services. At the same time there have been movements in all three countries for the extension of social legislation, particularly in the field of public health. In describing