"The Same Subject Continued
(Concerning the General Power of Taxation) From the New York Packet."
[HAMILTON]
Friday, January 4, 1788.
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