FEDERALIST No. 32



The Same Subject Continued

(Concerning the General Power of Taxation)

From the Independent Journal.

Wednesday, January 2, 1788.



HAMILTON



To the People of the State of New York:



ALTHOUGH I am of opinion that there would be no real danger of the

consequences which seem to be apprehended to the State governments from

a power in the Union to control them in the levies of money, because I

am persuaded that the sense of the people, the extreme hazard of

provoking the resentments of the State governments, and a conviction of

the utility and necessity of local administrations for local purposes,

would be a complete barrier against the oppressive use of such a power;

yet I am willing here to allow, in its full extent, the justness of the

reasoning which requires that the individual States should possess an

independent and uncontrollable authority to raise their own revenues for

the supply of their own wants. And making this concession, I affirm that

(with the sole exception of duties on imports and exports) they would,

under the plan of the convention, retain that authority in the most

absolute and unqualified sense; and that an attempt on the part of the

national government to abridge them in the exercise of it, would be a

violent assumption of power, unwarranted by any article or clause of its

Constitution.



An entire consolidation of the States into one complete national

sovereignty would imply an entire subordination of the parts; and

whatever powers might remain in them, would be altogether dependent on

the general will. But as the plan of the convention aims only at a

partial union or consolidation, the State governments would clearly

retain all the rights of sovereignty which they before had, and which

were not, by that act, EXCLUSIVELY delegated to the United States. This

exclusive delegation, or rather this alienation, of State sovereignty,

would only exist in three cases: where the Constitution in express terms

granted an exclusive authority to the Union; where it granted in one

instance an authority to the Union, and in another prohibited the States

from exercising the like authority; and where it granted an authority to

the Union, to which a similar authority in the States would be

absolutely and totally CONTRADICTORY and REPUGNANT. I use these terms to

distinguish this last case from another which might appear to resemble

it, but which would, in fact, be essentially different; I mean where the

exercise of a concurrent jurisdiction might be productive of occasional

interferences in the POLICY of any branch of administration, but would

not imply any direct contradiction or repugnancy in point of

constitutional authority. These three cases of exclusive jurisdiction in

the federal government may be exemplified by the following instances:

The last clause but one in the eighth section of the first article

provides expressly that Congress shall exercise "EXCLUSIVE LEGISLATION"

over the district to be appropriated as the seat of government. This

answers to the first case. The first clause of the same section empowers

Congress "to lay and collect taxes, duties, imposts and excises"; and

the second clause of the tenth section of the same article declares

that, "NO STATE SHALL, without the consent of Congress, lay any imposts

or duties on imports or exports, except for the purpose of executing its

inspection laws." Hence would result an exclusive power in the Union to

lay duties on imports and exports, with the particular exception

mentioned; but this power is abridged by another clause, which declares

that no tax or duty shall be laid on articles exported from any State;

in consequence of which qualification, it now only extends to the DUTIES

ON IMPORTS. This answers to the second case. The third will be found in

that clause which declares that Congress shall have power "to establish

an UNIFORM RULE of naturalization throughout the United States." This

must necessarily be exclusive; because if each State had power to

prescribe a DISTINCT RULE, there could not be a UNIFORM RULE.



A case which may perhaps be thought to resemble the latter, but which is

in fact widely different, affects the question immediately under

consideration. I mean the power of imposing taxes on all articles other

than exports and imports. This, I contend, is manifestly a concurrent

and coequal authority in the United States and in the individual States.

There is plainly no expression in the granting clause which makes that

power EXCLUSIVE in the Union. There is no independent clause or sentence

which prohibits the States from exercising it. So far is this from being

the case, that a plain and conclusive argument to the contrary is to be

deduced from the restraint laid upon the States in relation to duties on

imports and exports. This restriction implies an admission that, if it

were not inserted, the States would possess the power it excludes; and

it implies a further admission, that as to all other taxes, the

authority of the States remains undiminished. In any other view it would

be both unnecessary and dangerous; it would be unnecessary, because if

the grant to the Union of the power of laying such duties implied the

exclusion of the States, or even their subordination in this particular,

there could be no need of such a restriction; it would be dangerous,

because the introduction of it leads directly to the conclusion which

has been mentioned, and which, if the reasoning of the objectors be

just, could not have been intended; I mean that the States, in all cases

to which the restriction did not apply, would have a concurrent power of

taxation with the Union. The restriction in question amounts to what

lawyers call a NEGATIVE PREGNANT that is, a NEGATION of one thing, and

an AFFIRMANCE of another; a negation of the authority of the States to

impose taxes on imports and exports, and an affirmance of their

authority to impose them on all other articles. It would be mere

sophistry to argue that it was meant to exclude them ABSOLUTELY from the

imposition of taxes of the former kind, and to leave them at liberty to

lay others SUBJECT TO THE CONTROL of the national legislature. The

restraining or prohibitory clause only says, that they shall not,

WITHOUT THE CONSENT OF CONGRESS, lay such duties; and if we are to

understand this in the sense last mentioned, the Constitution would then

be made to introduce a formal provision for the sake of a very absurd

conclusion; which is, that the States, WITH THE CONSENT of the national

legislature, might tax imports and exports; and that they might tax

every other article, UNLESS CONTROLLED by the same body. If this was the

intention, why not leave it, in the first instance, to what is alleged

to be the natural operation of the original clause, conferring a general

power of taxation upon the Union? It is evident that this could not have

been the intention, and that it will not bear a construction of the

kind.



As to a supposition of repugnancy between the power of taxation in the

States and in the Union, it cannot be supported in that sense which

would be requisite to work an exclusion of the States. It is, indeed,

possible that a tax might be laid on a particular article by a State

which might render it INEXPEDIENT that thus a further tax should be laid

on the same article by the Union; but it would not imply a

constitutional inability to impose a further tax. The quantity of the

imposition, the expediency or inexpediency of an increase on either

side, would be mutually questions of prudence; but there would be

involved no direct contradiction of power. The particular policy of the

national and of the State systems of finance might now and then not

exactly coincide, and might require reciprocal forbearances. It is not,

however a mere possibility of inconvenience in the exercise of powers,

but an immediate constitutional repugnancy that can by implication

alienate and extinguish a pre-existing right of sovereignty.



The necessity of a concurrent jurisdiction in certain cases results from

the division of the sovereign power; and the rule that all authorities,

of which the States are not explicitly divested in favor of the Union,

remain with them in full vigor, is not a theoretical consequence of that

division, but is clearly admitted by the whole tenor of the instrument

which contains the articles of the proposed Constitution. We there find

that, notwithstanding the affirmative grants of general authorities,

there has been the most pointed care in those cases where it was deemed

improper that the like authorities should reside in the States, to

insert negative clauses prohibiting the exercise of them by the States.

The tenth section of the first article consists altogether of such

provisions. This circumstance is a clear indication of the sense of the

convention, and furnishes a rule of interpretation out of the body of

the act, which justifies the position I have advanced and refutes every

hypothesis to the contrary.



PUBLIUS