Federalist Papers Summary 31
The Federalist Essays Summary No 31: Alexander Hamilton January 1, 1788
In this paper Hamilton presents the primary argument against giving the federal government unlimited power to tax. Before doing so, he makes the case that there are unassailable truths in geometry and mathematics and although not as definitive there are also fundamental truths in politics. In politics, however, there are biases which lead to doubters even of the truths known from experience concerning the need for the national government to have taxing authority. These truths are:
A government must contain without control the means to execute its responsibilities.
Since one of the powers is defense of the nation, that power should have no bounds.
Revenue is the source of the power.
As theory and practice have shown that the ability to procure revenue through taxation by the federal government must be unqualified.
The argument against this unbounded power given by the antagonists to the proposed constitution is essentially that States also need revenue raised by taxation and over time the federal government may use its unlimited power to “abolish the taxes imposed for State objects upon the pretense of an interference with its own”. “And thus all the resources of taxation might by degrees become the subjects of federal monopoly to the intire exclusion and destruction of the State Governments.”
The counter argument claimed this would only happen through the federal government usurpation of the rights of the States but that discussion leads to “an unfathomable abyss and fairly puts ourselves out of the reach of all reasoning” and anyway the structure of the proposed government prevents this usurpation by preserving all State’s constitutions. Further the people being closer to the State Governments would cause the States to be victors in any conflict of this type.
Interesting to contemplate this issue and observe which argument proved correct. Many States are clearly in budget difficulties and perhaps because the Federal Government has over taxed many of the same sources that the States tax thereby not leaving enough for the States. If the Federal Government taxed income, profits and consumption less, could the States tax more without suffering the ire of the population? The States and their politicians are also more vulnerable to the ire of the populations since the people can flee to lower taxed States but seldom flee the nation and State politics is easier to change at the ballot box than Federal policies. The passage of time indicates the argument against giving the Federal Government unbounded taxing authority may have been correct.
Federalist Papers Summary 31 Written by Donald Mellon