1787 Federalist 30 · Founding Made Plain

11787 Federalist No. 30

2Concerning the General Power of Taxation

3From the New York Packet.

4Friday, December 28, 1787.

5HAMILTON

6To the People of the State of New York:

7IT HAS been already observed

8 that the federal government ought to possess

9 the power of providing for the support

10 of the national forces;

11 in which proposition was intended to be included

12 the expense of raising troops,

13 of building and equipping fleets,

14 and all other expenses in any wise connected

15 with military arrangements and operations.

16But these are not the only objects

17 to which the jurisdiction of the Union,

18 in respect to revenue,

19 must necessarily be empowered to extend.

20It must embrace a provision

21 for the support of the national civil list;

22 for the payment of the national debts contracted,

23 or that may be contracted;

24 and, in general, for all those matters

25 which will call for disbursements

26 out of the national treasury.

27The conclusion is,

28 that there must be interwoven,

29 in the frame of the government,

30 a general power of taxation,

31 in one shape or another.

32Money is, with propriety,

33 considered as the vital principle

34 of the body politic;

35 as that which sustains its life and motion,

36 and enables it to perform its most essential functions.

37A complete power, therefore,

38 to procure a regular and adequate supply of it,

39 as far as the resources of the community

40 will permit,

41 may be regarded as an indispensable ingredient

42 in every constitution.

43From a deficiency in this particular,

44 one of two evils must ensue;

45 either the people must be subjected

46 to continual plunder,

47 as a substitute for a more eligible mode

48 of supplying the public wants,

49 or the government must sink into a fatal atrophy,

50 and, in a short course of time, perish.

51In the Ottoman or Turkish empire,

52 the sovereign,

53 though in other respects absolute master

54 of the lives and fortunes of his subjects,

55 has no right to impose a new tax.

56The consequence is

57 that he permits the bashaws

58 or governors of provinces

59 to pillage the people without mercy;

60 and, in turn, squeezes out of them the sums

61 of which he stands in need,

62 to satisfy his own exigencies

63 and those of the state.

64In America, from a like cause,

65 the government of the Union has gradually dwindled

66 into a state of decay,

67 approaching nearly to annihilation.

68Who can doubt,

69 that the happiness of the people in both countries

70 would be promoted by competent authorities

71 in the proper hands,

72 to provide the revenues

73 which the necessities of the public might require?

74The present Confederation,

75 feeble as it is intended to repose

76 in the United States,

77 an unlimited power of providing

78 for the pecuniary wants of the Union.

79But proceeding upon an erroneous principle,

80 it has been done in such a manner

81 as entirely to have frustrated the intention.

82Congress, by the articles which compose that compact

83 (as has already been stated),

84 are authorized to ascertain and call for

85 any sums of money necessary,

86 in their judgment,

87 to the service of the United States;

88 and their requisitions,

89 if conformable to the rule of apportionment,

90 are in every constitutional sense

91 obligatory upon the States.

92These have no right to question

93 the propriety of the demand;

94 no discretion beyond that of devising

95 the ways and means

96 of furnishing the sums demanded.

97But though this be strictly and truly the case;

98 though the assumption of such a right

99 would be an infringement of the articles of Union;

100 though it may seldom or never

101 have been avowedly claimed,

102 yet in practice it has been constantly exercised,

103 and would continue to be so,

104 as long as the revenues of the Confederacy

105 should remain dependent

106 on the intermediate agency of its members.

107What the consequences of this system have been,

108 is within the knowledge of every man

109 the least conversant in our public affairs,

110 and has been amply unfolded

111 in different parts of these inquiries.

112It is this which has chiefly contributed

113 to reduce us to a situation,

114 which affords ample cause

115 both of mortification to ourselves,

116 and of triumph to our enemies.

117What remedy can there be for this situation,

118 but in a change of the system

119 which has produced it

120 in a change of the fallacious and delusive system

121 of quotas and requisitions?

122What substitute can there be imagined

123 for this ignis fatuus in finance,

124 but that of permitting the national government

125 to raise its own revenues

126 by the ordinary methods of taxation

127 authorized in every well-ordered constitution

128 of civil government?

129Ingenious men may declaim with plausibility

130 on any subject;

131 but no human ingenuity can point out

132 any other expedient to rescue us

133 from the inconveniences and embarrassments

134 naturally resulting

135 from defective supplies of the public treasury.

136The more intelligent adversaries

137 of the new Constitution

138 admit the force of this reasoning;

139 but they qualify their admission

140 by a distinction between what they call

141 INTERNAL and EXTERNAL taxation.

142The former they would reserve

143 to the State governments;

144 the latter, which they explain into commercial imposts,

145 or rather duties on imported articles,

146 they declare themselves willing

147 to concede to the federal head.

148This distinction, however,

149 would violate the maxim of good sense and sound policy,

150 which dictates that every POWER

151 ought to be in proportion to its OBJECT;

152 and would still leave the general government

153 in a kind of tutelage to the State governments,

154 inconsistent with every idea

155 of vigor or efficiency.

156Who can pretend

157 that commercial imposts are, or would be,

158 alone equal to the present and future exigencies

159 of the Union?

160Taking into the account the existing debt,

161 foreign and domestic,

162 upon any plan of extinguishment

163 which a man moderately impressed

164 with the importance of public justice

165 and public credit could approve,

166 in addition to the establishments

167 which all parties will acknowledge

168 to be necessary,

169 we could not reasonably flatter ourselves,

170 that this resource alone,

171 upon the most improved scale,

172 would even suffice for its present necessities.

173Its future necessities admit not

174 of calculation or limitation;

175 and upon the principle,

176 more than once adverted to,

177 the power of making provision for them

178 as they arise

179 ought to be equally unconfined.

180I believe it may be regarded as a position

181 warranted by the history of mankind,

182 that, IN THE USUAL PROGRESS OF THINGS,

183 THE NECESSITIES OF A NATION,

184 IN EVERY STAGE OF ITS EXISTENCE,

185 WILL BE FOUND AT LEAST EQUAL

186 TO ITS RESOURCES.

187To say that deficiencies may be provided for

188 by requisitions upon the States,

189 is on the one hand to acknowledge

190 that this system cannot be depended upon,

191 and on the other hand to depend upon it

192 for every thing beyond a certain limit.

193Those who have carefully attended

194 to its vices and deformities

195 as they have been exhibited by experience

196 or delineated in the course of these papers,

197 must feel invincible repugnancy

198 to trusting the national interests

199 in any degree to its operation.

200Its inevitable tendency,

201 whenever it is brought into activity,

202 must be to enfeeble the Union,

203 and sow the seeds of discord and contention

204 between the federal head and its members,

205 and between the members themselves.

206Can it be expected

207 that the deficiencies would be better supplied

208 in this mode

209 than the total wants of the Union

210 have heretofore been supplied

211 in the same mode?

212It ought to be recollected

213 that if less will be required from the States,

214 they will have proportionably less means

215 to answer the demand.

216If the opinions of those

217 who contend for the distinction

218 which has been mentioned

219 were to be received as evidence of truth,

220 one would be led to conclude

221 that there was some known point

222 in the economy of national affairs

223 at which it would be safe to stop

224 and to say:

225 Thus far the ends of public happiness

226 will be promoted

227 by supplying the wants of government,

228 and all beyond this

229 is unworthy of our care or anxiety.

230How is it possible

231 that a government half supplied

232 and always necessitous,

233 can fulfill the purposes of its institution,

234 can provide for the security,

235 advance the prosperity,

236 or support the reputation of the commonwealth?

237How can it ever possess

238 either energy or stability,

239 dignity or credit,

240 confidence at home or respectability abroad?

241How can its administration be any thing else

242 than a succession of expedients

243 temporizing, impotent, disgraceful?

244How will it be able to avoid

245 a frequent sacrifice of its engagements

246 to immediate necessity?

247How can it undertake or execute

248 any liberal or enlarged plans of public good?

249Let us attend to what would be the effects

250 of this situation

251 in the very first war

252 in which we should happen to be engaged.

253We will presume, for argument's sake,

254 that the revenue arising from the impost duties

255 answers the purposes of a provision

256 for the public debt

257 and of a peace establishment for the Union.

258Thus circumstanced, a war breaks out.

259What would be the probable conduct

260 of the government in such an emergency?

261Taught by experience

262 that proper dependence could not be placed

263 on the success of requisitions,

264 unable by its own authority

265 to lay hold of fresh resources,

266 and urged by considerations of national danger,

267 would it not be driven to the expedient

268 of diverting the funds already appropriated

269 from their proper objects

270 to the defense of the State?

271It is not easy to see

272 how a step of this kind could be avoided;

273 and if it should be taken, it is evident

274 that it would prove the destruction

275 of public credit

276 at the very moment

277 that it was becoming essential

278 to the public safety.

279To imagine that at such a crisis

280 credit might be dispensed with,

281 would be the extreme of infatuation.

282In the modern system of war,

283 nations the most wealthy are obliged

284 to have recourse to large loans.

285A country so little opulent as ours

286 must feel this necessity

287 in a much stronger degree.

288But who would lend to a government

289 that prefaced its overtures for borrowing

290 by an act which demonstrated

291 that no reliance could be placed

292 on the steadiness of its measures for paying?

293The loans it might be able to procure

294 would be as limited in their extent

295 as burdensome in their conditions.

296They would be made upon the same principles

297 that usurers commonly lend

298 to bankrupt and fraudulent debtors,

299 with a sparing hand

300 and at enormous premiums.

301It may perhaps be imagined that,

302 from the scantiness of the resources of the country,

303 the necessity of diverting the established funds

304 in the case supposed would exist,

305 though the national government

306 should possess an unrestrained power of taxation.

307But two considerations will serve

308 to quiet all apprehension on this head:

309 one is, that we are sure the resources

310 of the community, in their full extent,

311 will be brought into activity

312 for the benefit of the Union;

313 the other is, that whatever deficiences there may be,

314 can without difficulty be supplied by loans.

315The power of creating new funds

316 upon new objects of taxation,

317 by its own authority,

318 would enable the national government to borrow

319 as far as its necessities might require.

320Foreigners, as well as the citizens of America,

321 could then reasonably repose confidence

322 in its engagements;

323 but to depend upon a government

324 that must itself depend

325 upon thirteen other governments

326 for the means of fulfilling its contracts,

327 when once its situation is clearly understood,

328 would require a degree of credulity

329 not often to be met with

330 in the pecuniary transactions of mankind,

331 and little reconcilable

332 with the usual sharp-sightedness of avarice.

333Reflections of this kind may have trifling weight

334 with men who hope to see realized in America

335 the halcyon scenes

336 of the poetic or fabulous age;

337 but to those who believe we are likely to experience

338 a common portion of the vicissitudes and calamities

339 which have fallen to the lot of other nations,

340 they must appear entitled to serious attention.

341Such men must behold the actual situation

342 of their country with painful solicitude,

343 and deprecate the evils

344 which ambition or revenge might,

345 with too much facility, inflict upon it.

346PUBLIUS.