1787 Federalist 35 · Founding Made Plain

11787 Federalist No. 35

2The Same Subject Continued

3Concerning the General Power of Taxation

4For the Independent Journal.

5HAMILTON

6To the People of the State of New York:

7BEFORE we proceed to examine any other objections

8 to an indefinite power of taxation in the Union,

9 I shall make one general remark;

10 which is, that if the jurisdiction

11 of the national government,

12 in the article of revenue,

13 should be restricted to particular objects,

14 it would naturally occasion an undue proportion

15 of the public burdens to fall upon those objects.

16Two evils would spring from this source:

17 the oppression of particular branches of industry;

18 and an unequal distribution of the taxes,

19 as well among the several States

20 as among the citizens of the same State.

21Suppose, as has been contended for,

22 the federal power of taxation

23 were to be confined to duties on imports,

24 it is evident that the government,

25 for want of being able to command other resources,

26 would frequently be tempted

27 to extend these duties to an injurious excess.

28There are persons who imagine

29 that they can never be carried to too great a length;

30 since the higher they are,

31 the more it is alleged they will tend

32 to discourage an extravagant consumption,

33 to produce a favorable balance of trade,

34 and to promote domestic manufactures.

35But all extremes are pernicious in various ways.

36Exorbitant duties on imported articles

37 would beget a general spirit of smuggling;

38 which is always prejudicial to the fair trader,

39 and eventually to the revenue itself:

40 they tend to render other classes of the community

41 tributary, in an improper degree,

42 to the manufacturing classes,

43 to whom they give a premature monopoly

44 of the markets;

45 they sometimes force industry

46 out of its more natural channels

47 into others in which it flows

48 with less advantage;

49 and in the last place, they oppress the merchant,

50 who is often obliged to pay them himself

51 without any retribution from the consumer.

52When the demand is equal

53 to the quantity of goods at market,

54 the consumer generally pays the duty;

55 but when the markets happen to be overstocked,

56 a great proportion falls upon the merchant,

57 and sometimes not only exhausts his profits,

58 but breaks in upon his capital.

59I am apt to think that a division of the duty,

60 between the seller and the buyer,

61 more often happens than is commonly imagined.

62It is not always possible

63 to raise the price of a commodity

64 in exact proportion

65 to every additional imposition laid upon it.

66The merchant,

67 especially in a country of small commercial capital,

68 is often under a necessity of keeping prices down

69 in order to a more expeditious sale.

70The maxim that the consumer is the payer,

71 is so much oftener true

72 than the reverse of the proposition,

73 that it is far more equitable

74 that the duties on imports should go

75 into a common stock,

76 than that they should redound

77 to the exclusive benefit

78 of the importing States.

79But it is not so generally true

80 as to render it equitable,

81 that those duties should form

82 the only national fund.

83When they are paid by the merchant

84 they operate as an additional tax

85 upon the importing State,

86 whose citizens pay their proportion of them

87 in the character of consumers.

88In this view they are productive of inequality

89 among the States;

90 which inequality would be increased

91 with the increased extent of the duties.

92The confinement of the national revenues

93 to this species of imposts

94 would be attended with inequality,

95 from a different cause,

96 between the manufacturing

97 and the non-manufacturing States.

98The States which can go farthest

99 towards the supply of their own wants,

100 by their own manufactures,

101 will not, according to their numbers or wealth,

102 consume so great a proportion of imported articles

103 as those States

104 which are not in the same favorable situation.

105They would not, therefore, in this mode alone

106 contribute to the public treasury

107 in a ratio to their abilities.

108To make them do this it is necessary

109 that recourse be had to excises,

110 the proper objects of which

111 are particular kinds of manufactures.

112New York is more deeply interested

113 in these considerations

114 than such of her citizens

115 as contend for limiting the power of the Union

116 to external taxation may be aware of.

117New York is an importing State,

118 and is not likely speedily to be,

119 to any great extent, a manufacturing State.

120She would, of course, suffer in a double light

121 from restraining the jurisdiction of the Union

122 to commercial imposts.

123So far as these observations tend to inculcate

124 a danger of the import duties

125 being extended to an injurious extreme

126 it may be observed,

127 conformably to a remark made

128 in another part of these papers,

129 that the interest of the revenue itself

130 would be a sufficient guard

131 against such an extreme.

132I readily admit that this would be the case,

133 as long as other resources were open;

134 but if the avenues to them were closed,

135 HOPE, stimulated by necessity,

136 would beget experiments,

137 fortified by rigorous precautions

138 and additional penalties,

139 which, for a time,

140 would have the intended effect,

141 till there had been leisure

142 to contrive expedients

143 to elude these new precautions.

144The first success would be apt

145 to inspire false opinions,

146 which it might require a long course

147 of subsequent experience to correct.

148Necessity, especially in politics,

149 often occasions false hopes, false reasonings,

150 and a system of measures

151 correspondingly erroneous.

152But even if this supposed excess should not be

153 a consequence of the limitation

154 of the federal power of taxation,

155 the inequalities spoken of would still ensue,

156 though not in the same degree,

157 from the other causes that have been noticed.

158Let us now return to the examination of objections.

159One which, if we may judge

160 from the frequency of its repetition,

161 seems most to be relied on, is,

162 that the House of Representatives

163 is not sufficiently numerous

164 for the reception of all the different classes

165 of citizens,

166 in order to combine the interests and feelings

167 of every part of the community,

168 and to produce a due sympathy

169 between the representative body

170 and its constituents.

171This argument presents itself

172 under a very specious and seducing form;

173 and is well calculated to lay hold

174 of the prejudices of those

175 to whom it is addressed.

176But when we come to dissect it with attention,

177 it will appear to be made up of nothing

178 but fair-sounding words.

179The object it seems to aim at is,

180 in the first place, impracticable,

181 and in the sense in which it is contended for,

182 is unnecessary.

183I reserve for another place the discussion

184 of the question which relates

185 to the sufficiency of the representative body

186 in respect to numbers,

187 and shall content myself with examining here

188 the particular use

189 which has been made of a contrary supposition,

190 in reference to the immediate subject

191 of our inquiries.

192The idea of an actual representation

193 of all classes of the people,

194 by persons of each class,

195 is altogether visionary.

196Unless it were expressly provided

197 in the Constitution,

198 that each different occupation

199 should send one or more members,

200 the thing would never take place in practice.

201Mechanics and manufacturers will always be inclined,

202 with few exceptions,

203 to give their votes to merchants,

204 in preference to persons

205 of their own professions or trades.

206Those discerning citizens are well aware

207 that the mechanic and manufacturing arts

208 furnish the materials

209 of mercantile enterprise and industry.

210Many of them, indeed,

211 are immediately connected

212 with the operations of commerce.

213They know that the merchant

214 is their natural patron and friend;

215 and they are aware,

216 that however great the confidence

217 they may justly feel

218 in their own good sense,

219 their interests can be more effectually promoted

220 by the merchant than by themselves.

221They are sensible that their habits in life

222 have not been such as to give them

223 those acquired endowments,

224 without which, in a deliberative assembly,

225 the greatest natural abilities

226 are for the most part useless;

227 and that the influence and weight,

228 and superior acquirements of the merchants

229 render them more equal to a contest

230 with any spirit

231 which might happen to infuse itself

232 into the public councils,

233 unfriendly to the manufacturing

234 and trading interests.

235These considerations,

236 and many others that might be mentioned prove,

237 and experience confirms it,

238 that artisans and manufacturers

239 will commonly be disposed

240 to bestow their votes upon merchants

241 and those whom they recommend.

242We must therefore consider merchants

243 as the natural representatives

244 of all these classes of the community.

245With regard to the learned professions,

246 little need be observed;

247 they truly form no distinct interest in society,

248 and according to their situation and talents,

249 will be indiscriminately the objects

250 of the confidence and choice of each other,

251 and of other parts of the community.

252Nothing remains but the landed interest;

253 and this, in a political view,

254 and particularly in relation to taxes,

255 I take to be perfectly united,

256 from the wealthiest landlord

257 down to the poorest tenant.

258No tax can be laid on land

259 which will not affect the proprietor

260 of millions of acres

261 as well as the proprietor of a single acre.

262Every landholder will therefore have a common interest

263 to keep the taxes on land as low as possible;

264 and common interest may always be reckoned upon

265 as the surest bond of sympathy.

266But if we even could suppose a distinction of interest

267 between the opulent landholder

268 and the middling farmer,

269 what reason is there to conclude,

270 that the first would stand a better chance

271 of being deputed to the national legislature

272 than the last?

273If we take fact as our guide,

274 and look into our own senate and assembly,

275 we shall find that moderate proprietors of land

276 prevail in both;

277 nor is this less the case in the senate,

278 which consists of a smaller number,

279 than in the assembly,

280 which is composed of a greater number.

281Where the qualifications of the electors are the same,

282 whether they have to choose

283 a small or a large number,

284 their votes will fall upon those

285 in whom they have most confidence;

286 whether these happen to be men of large fortunes,

287 or of moderate property,

288 or of no property at all.

289It is said to be necessary,

290 that all classes of citizens should have

291 some of their own number

292 in the representative body,

293 in order that their feelings and interests

294 may be the better understood and attended to.

295But we have seen that this will never happen

296 under any arrangement

297 that leaves the votes of the people free.

298Where this is the case,

299 the representative body,

300 with too few exceptions

301 to have any influence

302 on the spirit of the government,

303 will be composed of landholders, merchants,

304 and men of the learned professions.

305But where is the danger

306 that the interests and feelings

307 of the different classes of citizens

308 will not be understood or attended to

309 by these three descriptions of men?

310Will not the landholder know and feel

311 whatever will promote or insure

312 the interest of landed property?

313And will he not, from his own interest

314 in that species of property,

315 be sufficiently prone to resist every attempt

316 to prejudice or encumber it?

317Will not the merchant understand

318 and be disposed to cultivate,

319 as far as may be proper,

320 the interests of the mechanic

321 and manufacturing arts,

322 to which his commerce is so nearly allied?

323Will not the man of the learned profession,

324 who will feel a neutrality

325 to the rivalships

326 between the different branches of industry,

327 be likely to prove an impartial arbiter

328 between them,

329 ready to promote either,

330 so far as it shall appear to him

331 conducive to the general interests

332 of the society?

333If we take into the account

334 the momentary humors or dispositions

335 which may happen to prevail

336 in particular parts of the society,

337 and to which a wise administration

338 will never be inattentive,

339 is the man whose situation leads

340 to extensive inquiry and information

341 less likely to be a competent judge

342 of their nature, extent, and foundation

343 than one whose observation

344 does not travel beyond the circle

345 of his neighbors and acquaintances?

346Is it not natural

347 that a man who is a candidate

348 for the favor of the people,

349 and who is dependent on the suffrages

350 of his fellow-citizens

351 for the continuance of his public honors,

352 should take care to inform himself

353 of their dispositions and inclinations,

354 and should be willing to allow them

355 their proper degree of influence

356 upon his conduct?

357This dependence,

358 and the necessity of being bound himself,

359 and his posterity,

360 by the laws to which he gives his assent,

361 are the true, and they are the strong chords

362 of sympathy

363 between the representative and the constituent.

364There is no part of the administration of government

365 that requires extensive information

366 and a thorough knowledge

367 of the principles of political economy,

368 so much as the business of taxation.

369The man who understands those principles best

370 will be least likely to resort

371 to oppressive expedients,

372 or sacrifice any particular class of citizens

373 to the procurement of revenue.

374It might be demonstrated

375 that the most productive system of finance

376 will always be the least burdensome.

377There can be no doubt

378 that in order to a judicious exercise

379 of the power of taxation,

380 it is necessary that the person

381 in whose hands it should be acquainted

382 with the general genius, habits,

383 and modes of thinking of the people at large,

384 and with the resources of the country.

385And this is all that can be reasonably meant

386 by a knowledge of the interests and feelings

387 of the people.

388In any other sense the proposition

389 has either no meaning, or an absurd one.

390And in that sense let every considerate citizen

391 judge for himself

392 where the requisite qualification

393 is most likely to be found.

394PUBLIUS.