1787 Federalist 36 · Founding Made Plain

11787 Federalist No. 36

2The Same Subject Continued

3Concerning the General Power of Taxation

4From the New York Packet.

5Tuesday January 8, 1788.

6HAMILTON

7To the People of the State of New York:

8WE HAVE seen that the result of the observations,

9 to which the foregoing number

10 has been principally devoted,

11 is, that from the natural operation

12 of the different interests and views

13 of the various classes of the community,

14 whether the representation of the people

15 be more or less numerous,

16 it will consist almost entirely

17 of proprietors of land, of merchants,

18 and of members of the learned professions,

19 who will truly represent

20 all those different interests and views.

21If it should be objected

22 that we have seen other descriptions of men

23 in the local legislatures,

24 I answer that it is admitted

25 there are exceptions to the rule,

26 but not in sufficient number

27 to influence the general complexion

28 or character of the government.

29There are strong minds in every walk of life

30 that will rise superior

31 to the disadvantages of situation,

32 and will command the tribute due to their merit,

33 not only from the classes

34 to which they particularly belong,

35 but from the society in general.

36The door ought to be equally open to all;

37 and I trust, for the credit of human nature,

38 that we shall see examples

39 of such vigorous plants

40 flourishing in the soil of federal

41 as well as of State legislation;

42 but occasional instances of this sort

43 will not render the reasoning

44 founded upon the general course of things,

45 less conclusive.

46The subject might be placed in several other lights

47 that would all lead to the same result;

48 and in particular it might be asked,

49 What greater affinity

50 or relation of interest can be conceived

51 between the carpenter and blacksmith,

52 and the linen manufacturer or stocking weaver,

53 than between the merchant and either of them?

54It is notorious

55 that there are often as great rivalships

56 between different branches

57 of the mechanic or manufacturing arts

58 as there are between any of the departments

59 of labor and industry;

60 so that, unless the representative body

61 were to be far more numerous

62 than would be consistent

63 with any idea of regularity or wisdom

64 in its deliberations,

65 it is impossible that what seems to be

66 the spirit of the objection

67 we have been considering

68 should ever be realized in practice.

69But I forbear to dwell any longer

70 on a matter which has hitherto worn

71 too loose a garb

72 to admit even of an accurate inspection

73 of its real shape or tendency.

74There is another objection

75 of a somewhat more precise nature

76 that claims our attention.

77It has been asserted

78 that a power of internal taxation

79 in the national legislature

80 could never be exercised with advantage,

81 as well from the want

82 of a sufficient knowledge of local circumstances,

83 as from an interference

84 between the revenue laws of the Union

85 and of the particular States.

86The supposition of a want of proper knowledge

87 seems to be entirely destitute of foundation.

88If any question is depending in a State legislature

89 respecting one of the counties,

90 which demands a knowledge of local details,

91 how is it acquired?

92No doubt from the information

93 of the members of the county.

94Cannot the like knowledge be obtained

95 in the national legislature

96 from the representatives of each State?

97And is it not to be presumed

98 that the men who will generally be sent there

99 will be possessed of the necessary degree

100 of intelligence

101 to be able to communicate that information?

102Is the knowledge of local circumstances,

103 as applied to taxation,

104 a minute topographical acquaintance

105 with all the mountains, rivers, streams,

106 highways, and bypaths in each State;

107 or is it a general acquaintance

108 with its situation and resources,

109 with the state of its agriculture,

110 commerce, manufactures,

111 with the nature of its products

112 and consumptions,

113 with the different degrees and kinds

114 of its wealth, property, and industry?

115Nations in general,

116 even under governments of the more popular kind,

117 usually commit the administration of their finances

118 to single men or to boards

119 composed of a few individuals,

120 who digest and prepare, in the first instance,

121 the plans of taxation,

122 which are afterwards passed into laws

123 by the authority of the sovereign or legislature.

124Inquisitive and enlightened statesmen

125 are deemed everywhere best qualified

126 to make a judicious selection

127 of the objects proper for revenue;

128 which is a clear indication,

129 as far as the sense of mankind

130 can have weight in the question,

131 of the species of knowledge

132 of local circumstances

133 requisite to the purposes of taxation.

134The taxes intended to be comprised

135 under the general denomination of internal taxes

136 may be subdivided into those of the DIRECT

137 and those of the INDIRECT kind.

138Though the objection be made to both,

139 yet the reasoning upon it

140 seems to be confined to the former branch.

141And indeed, as to the latter,

142 by which must be understood duties and excises

143 on articles of consumption,

144 one is at a loss to conceive

145 what can be the nature

146 of the difficulties apprehended.

147The knowledge relating to them

148 must evidently be of a kind

149 that will either be suggested

150 by the nature of the article itself,

151 or can easily be procured

152 from any well-informed man,

153 especially of the mercantile class.

154The circumstances that may distinguish

155 its situation in one State

156 from its situation in another

157 must be few, simple,

158 and easy to be comprehended.

159The principal thing to be attended to,

160 would be to avoid those articles

161 which had been previously appropriated

162 to the use of a particular State;

163 and there could be no difficulty

164 in ascertaining the revenue system of each.

165This could always be known

166 from the respective codes of laws,

167 as well as from the information

168 of the members from the several States.

169The objection, when applied to real property

170 or to houses and lands,

171 appears to have, at first sight, more foundation,

172 but even in this view

173 it will not bear a close examination.

174Land taxes are co monly laid in one of two modes,

175 either by ACTUAL valuations,

176 permanent or periodical,

177 or by OCCASIONAL assessments,

178 at the discretion,

179 or according to the best judgment,

180 of certain officers

181 whose duty it is to make them.

182In either case, the EXECUTION of the business,

183 which alone requires the knowledge of local details,

184 must be devolved upon discreet persons

185 in the character of commissioners or assessors,

186 elected by the people

187 or appointed by the government

188 for the purpose.

189All that the law can do

190 must be to name the persons

191 or to prescribe the manner

192 of their election or appointment,

193 to fix their numbers and qualifications

194 and to draw the general outlines

195 of their powers and duties.

196And what is there in all this

197 that cannot as well be performed

198 by the national legislature

199 as by a State legislature?

200The attention of either

201 can only reach to general principles;

202 local details, as already observed,

203 must be referred to those

204 who are to execute the plan.

205But there is a simple point of view

206 in which this matter may be placed

207 that must be altogether satisfactory.

208The national legislature can make use

209 of the SYSTEM OF EACH STATE WITHIN THAT STATE.

210The method of laying and collecting

211 this species of taxes in each State

212 can, in all its parts,

213 be adopted and employed

214 by the federal government.

215Let it be recollected

216 that the proportion of these taxes

217 is not to be left to the discretion

218 of the national legislature,

219 but is to be determined

220 by the numbers of each State,

221 as described in the second section

222 of the first article.

223An actual census or enumeration of the people

224 must furnish the rule,

225 a circumstance which effectually shuts the door

226 to partiality or oppression.

227The abuse of this power of taxation

228 seems to have been provided against

229 with guarded circumspection.

230In addition to the precaution just mentioned,

231 there is a provision that

232 "all duties, imposts, and excises

233 shall be UNIFORM throughout the United States."

234It has been very properly observed

235 by different speakers and writers

236 on the side of the Constitution,

237 that if the exercise of the power

238 of internal taxation by the Union

239 should be discovered on experiment

240 to be really inconvenient,

241 the federal government may then forbear the use of it,

242 and have recourse to requisitions in its stead.

243By way of answer to this,

244 it has been triumphantly asked,

245 Why not in the first instance

246 omit that ambiguous power,

247 and rely upon the latter resource?

248Two solid answers may be given.

249The first is,

250 that the exercise of that power, if convenient,

251 will be preferable,

252 because it will be more effectual;

253 and it is impossible to prove in theory,

254 or otherwise than by the experiment,

255 that it cannot be advantageously exercised.

256The contrary, indeed, appears most probable.

257The second answer is,

258 that the existence of such a power

259 in the Constitution

260 will have a strong influence

261 in giving efficacy to requisitions.

262When the States know

263 that the Union can apply itself

264 without their agency,

265 it will be a powerful motive

266 for exertion on their part.

267As to the interference of the revenue laws

268 of the Union, and of its members,

269 we have already seen

270 that there can be no clashing

271 or repugnancy of authority.

272The laws cannot, therefore, in a legal sense,

273 interfere with each other;

274 and it is far from impossible

275 to avoid an interference

276 even in the policy of their different systems.

277An effectual expedient for this purpose

278 will be, mutually,

279 to abstain from those objects

280 which either side may have first had recourse to.

281As neither can CONTROL the other,

282 each will have an obvious and sensible interest

283 in this reciprocal forbearance.

284And where there is an IMMEDIATE common interest,

285 we may safely count upon its operation.

286When the particular debts of the States are done away,

287 and their expenses come to be limited

288 within their natural compass,

289 the possibility almost of interference will vanish.

290A small land tax will answer the purpose

291 of the States,

292 and will be their most simple

293 and most fit resource.

294Many spectres have been raised

295 out of this power of internal taxation,

296 to excite the apprehensions of the people:

297 double sets of revenue officers,

298 a duplication of their burdens

299 by double taxations,

300 and the frightful forms

301 of odious and oppressive poll-taxes,

302 have been played off

303 with all the ingenious dexterity

304 of political legerdemain.

305As to the first point,

306 there are two cases

307 in which there can be no room

308 for double sets of officers:

309 one, where the right of imposing the tax

310 is exclusively vested in the Union,

311 which applies to the duties on imports;

312 the other, where the object has not fallen

313 under any State regulation or provision,

314 which may be applicable

315 to a variety of objects.

316In other cases, the probability is

317 that the United States will either wholly abstain

318 from the objects preoccupied for local purposes,

319 or will make use of the State officers

320 and State regulations

321 for collecting the additional imposition.

322This will best answer the views of revenue,

323 because it will save expense in the collection,

324 and will best avoid any occasion of disgust

325 to the State governments and to the people.

326At all events,

327 here is a practicable expedient

328 for avoiding such an inconvenience;

329 and nothing more can be required

330 than to show that evils predicted

331 to not necessarily result from the plan.

332As to any argument derived

333 from a supposed system of influence,

334 it is a sufficient answer to say

335 that it ought not to be presumed;

336 but the supposition is susceptible

337 of a more precise answer.

338If such a spirit should infest

339 the councils of the Union,

340 the most certain road

341 to the accomplishment of its aim

342 would be to employ the State officers

343 as much as possible,

344 and to attach them to the Union

345 by an accumulation of their emoluments.

346This would serve to turn the tide

347 of State influence

348 into the channels of the national government,

349 instead of making federal influence flow

350 in an opposite and adverse current.

351But all suppositions of this kind are invidious,

352 and ought to be banished

353 from the consideration

354 of the great question before the people.

355They can answer no other end

356 than to cast a mist over the truth.

357As to the suggestion of double taxation,

358 the answer is plain.

359The wants of the Union

360 are to be supplied in one way or another;

361 if to be done by the authority

362 of the federal government,

363 it will not be to be done

364 by that of the State government.

365The quantity of taxes to be paid by the community

366 must be the same in either case;

367 with this advantage,

368 if the provision is to be made by the Union

369 that the capital resource of commercial imposts,

370 which is the most convenient branch of revenue,

371 can be prudently improved

372 to a much greater extent

373 under federal than under State regulation,

374 and of course will render it less necessary

375 to recur to more inconvenient methods;

376 and with this further advantage,

377 that as far as there may be any real difficulty

378 in the exercise of the power

379 of internal taxation,

380 it will impose a disposition to greater care

381 in the choice and arrangement of the means;

382 and must naturally tend

383 to make it a fixed point of policy

384 in the national administration

385 to go as far as may be practicable

386 in making the luxury of the rich

387 tributary to the public treasury,

388 in order to diminish the necessity

389 of those impositions

390 which might create dissatisfaction

391 in the poorer and most numerous classes

392 of the society.

393Happy it is

394 when the interest which the government has

395 in the preservation of its own power,

396 coincides with a proper distribution

397 of the public burdens,

398 and tends to guard the least wealthy part

399 of the community from oppression!

400As to poll taxes,

401 I, without scruple, confess my disapprobation

402 of them;

403 and though they have prevailed

404 from an early period in those States[1]

405 which have uniformly been

406 the most tenacious of their rights,

407 I should lament to see them introduced

408 into practice under the national government.

409But does it follow

410 because there is a power to lay them

411 that they will actually be laid?

412Every State in the Union

413 has power to impose taxes of this kind;

414 and yet in several of them

415 they are unknown in practice.

416Are the State governments to be stigmatized

417 as tyrannies, because they possess this power?

418If they are not,

419 with what propriety can the like power

420 justify such a charge

421 against the national government,

422 or even be urged

423 as an obstacle to its adoption?

424As little friendly as I am

425 to the species of imposition,

426 I still feel a thorough conviction

427 that the power of having recourse to it

428 ought to exist in the federal government.

429There are certain emergencies of nations,

430 in which expedients,

431 that in the ordinary state of things

432 ought to be forborne,

433 become essential to the public weal.

434And the government,

435 from the possibility of such emergencies,

436 ought ever to have the option

437 of making use of them.

438The real scarcity of objects in this country,

439 which may be considered

440 as productive sources of revenue,

441 is a reason peculiar to itself,

442 for not abridging the discretion

443 of the national councils in this respect.

444There may exist certain critical

445 and tempestuous conjunctures of the State,

446 in which a poll tax

447 may become an inestimable resource.

448And as I know nothing to exempt this portion

449 of the globe

450 from the common calamities

451 that have befallen other parts of it,

452 I acknowledge my aversion

453 to every project that is calculated

454 to disarm the government of a single weapon,

455 which in any possible contingency

456 might be usefully employed

457 for the general defense and security.

458I have now gone through the examination

459 of such of the powers proposed

460 to be vested in the United States,

461 which may be considered as having

462 an immediate relation

463 to the energy of the government;

464 and have endeavored to answer

465 the principal objections

466 which have been made to them.

467I have passed over in silence

468 those minor authorities,

469 which are either too inconsiderable

470 to have been thought worthy

471 of the hostilities

472 of the opponents of the Constitution,

473 or of too manifest propriety

474 to admit of controversy.

475The mass of judiciary power, however,

476 might have claimed an investigation under this head,

477 had it not been for the consideration

478 that its organization and its extent

479 may be more advantageously considered

480 in connection.

481This has determined me to refer it

482 to the branch of our inquiries

483 upon which we shall next enter.

484PUBLIUS.

485[1] The New England States.