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Federalist
No. 34
The Same Subject Continued:
Concerning the General Power of Taxation - From the New
York Packet. Friday, January 4, 1788. |
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Author: Alexander Hamilton
To the People of the State of New York:
I FLATTER myself it has been clearly shown in my last number
that the particular States, under the proposed Constitution,
would have COEQUAL authority with the Union in the article of
revenue, except as to duties on imports. As this leaves open to
the States far the greatest part of the resources of the
community, there can be no color for the assertion that they
would not possess means as abundant as could be desired for the
supply of their own wants, independent of all external control.
That the field is sufficiently wide will more fully appear when
we come to advert to the inconsiderable share of the public
expenses for which it will fall to the lot of the State
governments to provide.
To argue upon abstract principles that this co-ordinate
authority cannot exist, is to set up supposition and theory
against fact and reality. However proper such reasonings might
be to show that a thing OUGHT NOT TO EXIST, they are wholly to
be rejected when they are made use of to prove that it does not
exist contrary to the evidence of the fact itself. It is well
known that in the Roman republic the legislative authority, in
the last resort, resided for ages in two different political
bodies not as branches of the same legislature, but as distinct
and independent legislatures, in each of which an opposite
interest prevailed: in one the patrician; in the other, the
plebian. Many arguments might have been adduced to prove the
unfitness of two such seemingly contradictory authorities, each
having power to ANNUL or REPEAL the acts of the other. But a man
would have been regarded as frantic who should have attempted at
Rome to disprove their existence. It will be readily understood
that I allude to the COMITIA CENTURIATA and the COMITIA TRIBUTA.
The former, in which the people voted by centuries, was so
arranged as to give a superiority to the patrician interest; in
the latter, in which numbers prevailed, the plebian interest had
an entire predominancy. And yet these two legislatures coexisted
for ages, and the Roman republic attained to the utmost height
of human greatness.
In the case particularly under consideration, there is no such
contradiction as appears in the example cited; there is no power
on either side to annul the acts of the other. And in practice
there is little reason to apprehend any inconvenience; because,
in a short course of time, the wants of the States will
naturally reduce themselves within A VERY NARROW COMPASS; and in
the interim, the United States will, in all probability, find it
convenient to abstain wholly from those objects to which the
particular States would be inclined to resort.
To form a more precise judgment of the true merits of this
question, it will be well to advert to the proportion between
the objects that will require a federal provision in respect to
revenue, and those which will require a State provision. We
shall discover that the former are altogether unlimited, and
that the latter are circumscribed within very moderate bounds.
In pursuing this inquiry, we must bear in mind that we are not
to confine our view to the present period, but to look forward
to remote futurity. Constitutions of civil government are not to
be framed upon a calculation of existing exigencies, but upon a
combination of these with the probable exigencies of ages,
according to the natural and tried course of human affairs.
Nothing, therefore, can be more fallacious than to infer the
extent of any power, proper to be lodged in the national
government, from an estimate of its immediate necessities. There
ought to be a CAPACITY to provide for future contingencies as
they may happen; and as these are illimitable in their nature,
it is impossible safely to limit that capacity. It is true,
perhaps, that a computation might be made with sufficient
accuracy to answer the purpose of the quantity of revenue
requisite to discharge the subsisting engagements of the Union,
and to maintain those establishments which, for some time to
come, would suffice in time of peace. But would it be wise, or
would it not rather be the extreme of folly, to stop at this
point, and to leave the government intrusted with the care of
the national defense in a state of absolute incapacity to
provide for the protection of the community against future
invasions of the public peace, by foreign war or domestic
convulsions? If, on the contrary, we ought to exceed this point,
where can we stop, short of an indefinite power of providing for
emergencies as they may arise? Though it is easy to assert, in
general terms, the possibility of forming a rational judgment of
a due provision against probable dangers, yet we may safely
challenge those who make the assertion to bring forward their
data, and may affirm that they would be found as vague and
uncertain as any that could be produced to establish the
probable duration of the world. Observations confined to the
mere prospects of internal attacks can deserve no weight; though
even these will admit of no satisfactory calculation: but if we
mean to be a commercial people, it must form a part of our
policy to be able one day to defend that commerce. The support
of a navy and of naval wars would involve contingencies that
must baffle all the efforts of political arithmetic.
Admitting that we ought to try the novel and absurd experiment
in politics of tying up the hands of government from offensive
war founded upon reasons of state, yet certainly we ought not to
disable it from guarding the community against the ambition or
enmity of other nations. A cloud has been for some time hanging
over the European world. If it should break forth into a storm,
who can insure us that in its progress a part of its fury would
not be spent upon us? No reasonable man would hastily pronounce
that we are entirely out of its reach. Or if the combustible
materials that now seem to be collecting should be dissipated
without coming to maturity, or if a flame should be kindled
without extending to us, what security can we have that our
tranquillity will long remain undisturbed from some other cause
or from some other quarter? Let us recollect that peace or war
will not always be left to our option; that however moderate or
unambitious we may be, we cannot count upon the moderation, or
hope to extinguish the ambition of others. Who could have
imagined at the conclusion of the last war that France and
Britain, wearied and exhausted as they both were, would so soon
have looked with so hostile an aspect upon each other? To judge
from the history of mankind, we shall be compelled to conclude
that the fiery and destructive passions of war reign in the
human breast with much more powerful sway than the mild and
beneficent sentiments of peace; and that to model our political
systems upon speculations of lasting tranquillity, is to
calculate on the weaker springs of the human character.
What are the chief sources of expense in every government? What
has occasioned that enormous accumulation of debts with which
several of the European nations are oppressed? The answers
plainly is, wars and rebellions; the support of those
institutions which are necessary to guard the body politic
against these two most mortal diseases of society. The expenses
arising from those institutions which are relative to the mere
domestic police of a state, to the support of its legislative,
executive, and judicial departments, with their different
appendages, and to the encouragement of agriculture and
manufactures (which will comprehend almost all the objects of
state expenditure), are insignificant in comparison with those
which relate to the national defense.
In the kingdom of Great Britain, where all the ostentatious
apparatus of monarchy is to be provided for, not above a
fifteenth part of the annual income of the nation is
appropriated to the class of expenses last mentioned; the other
fourteen fifteenths are absorbed in the payment of the interest
of debts contracted for carrying on the wars in which that
country has been engaged, and in the maintenance of fleets and
armies. If, on the one hand, it should be observed that the
expenses incurred in the prosecution of the ambitious
enterprises and vainglorious pursuits of a monarchy are not a
proper standard by which to judge of those which might be
necessary in a republic, it ought, on the other hand, to be
remarked that there should be as great a disproportion between
the profusion and extravagance of a wealthy kingdom in its
domestic administration, and the frugality and economy which in
that particular become the modest simplicity of republican
government. If we balance a proper deduction from one side
against that which it is supposed ought to be made from the
other, the proportion may still be considered as holding good.
But let us advert to the large debt which we have ourselves
contracted in a single war, and let us only calculate on a
common share of the events which disturb the peace of nations,
and we shall instantly perceive, without the aid of any
elaborate illustration, that there must always be an immense
disproportion between the objects of federal and state
expenditures. It is true that several of the States, separately,
are encumbered with considerable debts, which are an excrescence
of the late war. But this cannot happen again, if the proposed
system be adopted; and when these debts are discharged, the only
call for revenue of any consequence, which the State governments
will continue to experience, will be for the mere support of
their respective civil list; to which, if we add all
contingencies, the total amount in every State ought to fall
considerably short of two hundred thousand pounds.
In framing a government for posterity as well as ourselves, we
ought, in those provisions which are designed to be permanent,
to calculate, not on temporary, but on permanent causes of
expense. If this principle be a just one our attention would be
directed to a provision in favor of the State governments for an
annual sum of about two hundred thousand pounds; while the
exigencies of the Union could be susceptible of no limits, even
in imagination. In this view of the subject, by what logic can
it be maintained that the local governments ought to command, in
perpetuity, an EXCLUSIVE source of revenue for any sum beyond
the extent of two hundred thousand pounds? To extend its power
further, in EXCLUSION of the authority of the Union, would be to
take the resources of the community out of those hands which
stood in need of them for the public welfare, in order to put
them into other hands which could have no just or proper
occasion for them.
Suppose, then, the convention had been inclined to proceed upon
the principle of a repartition of the objects of revenue,
between the Union and its members, in PROPORTION to their
comparative necessities; what particular fund could have been
selected for the use of the States, that would not either have
been too much or too little too little for their present, too
much for their future wants? As to the line of separation
between external and internal taxes, this would leave to the
States, at a rough computation, the command of two thirds of the
resources of the community to defray from a tenth to a twentieth
part of its expenses; and to the Union, one third of the
resources of the community, to defray from nine tenths to
nineteen twentieths of its expenses. If we desert this boundary
and content ourselves with leaving to the States an exclusive
power of taxing houses and lands, there would still be a great
disproportion between the MEANS and the END; the possession of
one third of the resources of the community to supply, at most,
one tenth of its wants. If any fund could have been selected and
appropriated, equal to and not greater than the object, it would
have been inadequate to the discharge of the existing debts of
the particular States, and would have left them dependent on the
Union for a provision for this purpose.
The preceding train of observation will justify the position
which has been elsewhere laid down, that ``A CONCURRENT
JURISDICTION in the article of taxation was the only admissible
substitute for an entire subordination, in respect to this
branch of power, of State authority to that of the Union.'' Any
separation of the objects of revenue that could have been fallen
upon, would have amounted to a sacrifice of the great INTERESTS
of the Union to the POWER of the individual States. The
convention thought the concurrent jurisdiction preferable to
that subordination; and it is evident that it has at least the
merit of reconciling an indefinite constitutional power of
taxation in the Federal government with an adequate and
independent power in the States to provide for their own
necessities. There remain a few other lights, in which this
important subject of taxation will claim a further
consideration.
PUBLIUS. |
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