The Supreme Court handed California a victory on June 20, upholding the state's controversial tax scheme for foreign multinationals. Justice Ruth Bader Ginsburg wrote in a 7-to-2 decision that the so-called unitary tax imposed on the California-based subsidiary of Britain's Barclays Bank did not violate the Constitution. The state had taxed a portion of Barclays' worldwide income, instead of just income produced in California. Despite the O.K. from the high court, though, few other states are likely to endorse the unitary tax, mostly because of protests from foreign trading partners. Even California changed its law last year to allow overseas multinationals to choose between a unitary tax and a more traditional method of taxation.
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