The City of Winnipegs taxation department is going $2 million over budget this year because Ottawa isnt paying its bills.

The finance committee authorized the taxation and assessment department today to over-spend its 2014 budget by $2 million.

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By Ama Sarfo

Law360, New York (November 12, 2014, 7:54 PM ET) -- US Supreme Court justices on Wednesday debated whether a Maryland tax scheme that credits residents for out-of-state income at the state but not county level is a discriminatory tariff but also questioned the idea that states must cede their worldwide taxing power to their peers.

Maryland Solicitor General William Brockman told the high court that the states scheme is constitutional because it treats all residents fairly and taxes their entire income regardless of where it is earned, and he argued that Marylands taxing power shouldnt be...

The case of the Maryland couple who protested paying taxes on the same income in two different states ran into a surprising wall of skepticism from the most conservative justice on the US Supreme Court, Antonin Scalia, who doesn't believe in the fundamental constitutional theory behind their argument.

In Wynne v. Maryland, Brian Wynne and his wife complained that they were forced to pay a county tax, collected by the state of Maryland, on income they earned as part owners of a corporation that did most of its business in other states. They claimed a credit for $84,550 on $2.7 million in income for taxes paid outside Maryland but the state refused to honor it.

The justices quickly launched into a debate about the limits of state taxing powers under the dormant Commerce Clause, a theory that the Supreme Court has adopted to justify striking down state laws that discriminate against interstate commerce, like a tax that is collected only on trucks with out-of-state registration.

The problem is, Scalia doesn't believe in the dormant Commerce Clause. And he made that clear as the justices discussed the hypothetical example of a hot-dog stand owner who lived in California and had a stand in Hawaii. Should he have to pay taxes on his Hawaii income in both states, or should California yield to Hawaii?

"I don't understandwhyitisthatCaliforniahasto yieldinthisCalifornia-shy;Hawaiisituation," Scalia said. "Why can't you just as well say, you know, Hawaii shouldn't be able to sock on an addition."

Then Scalia got to his real problem: "Maybe it doesn't work the same way with respect to the imaginary negative Commerce Clause, but shy;shy; but as far as fairness is concerned, I don't see the difference," he said.

Other justices seemed more sympathetic to the Wynns. Chief Justice John Roberts asked why the court shouldn't apply the standard test under the court's Commerce Clause decisions, which is to assume every state has the same tax policy and see if that would discourage people from doing business across state lines.

"If each State did what we're talking about, people who work in one State and live in another would pay higher taxes overall than people who live within one State and work in the same State," he told Maryland Acting Solicitor General William F. Brockman. "And that sounds to me like a tariff."

Justice Stephen Breyer asked what would happen if Switzerland taxed all milk produced below 5,000 feet.

"It's Belgium's fault. They don't have any mountains," he joked. Then he said, "I don't know who's at fault, but that's a discriminatory tariff."