FEDERALIST No. 36



The Same Subject Continued

(Concerning the General Power of Taxation)

From the New York Packet.

Tuesday, January 8, 1788.



HAMILTON



To the People of the State of New York:



WE HAVE seen that the result of the observations, to which the foregoing

number has been principally devoted, is, that from the natural operation

of the different interests and views of the various classes of the

community, whether the representation of the people be more or less

numerous, it will consist almost entirely of proprietors of land, of

merchants, and of members of the learned professions, who will truly

represent all those different interests and views. If it should be

objected that we have seen other descriptions of men in the local

legislatures, I answer that it is admitted there are exceptions to the

rule, but not in sufficient number to influence the general complexion

or character of the government. There are strong minds in every walk of

life that will rise superior to the disadvantages of situation, and will

command the tribute due to their merit, not only from the classes to

which they particularly belong, but from the society in general. The

door ought to be equally open to all; and I trust, for the credit of

human nature, that we shall see examples of such vigorous plants

flourishing in the soil of federal as well as of State legislation; but

occasional instances of this sort will not render the reasoning founded

upon the general course of things, less conclusive.



The subject might be placed in several other lights that would all lead

to the same result; and in particular it might be asked, What greater

affinity or relation of interest can be conceived between the carpenter

and blacksmith, and the linen manufacturer or stocking weaver, than

between the merchant and either of them? It is notorious that there are

often as great rivalships between different branches of the mechanic or

manufacturing arts as there are between any of the departments of labor

and industry; so that, unless the representative body were to be far

more numerous than would be consistent with any idea of regularity or

wisdom in its deliberations, it is impossible that what seems to be the

spirit of the objection we have been considering should ever be realized

in practice. But I forbear to dwell any longer on a matter which has

hitherto worn too loose a garb to admit even of an accurate inspection

of its real shape or tendency.



There is another objection of a somewhat more precise nature that claims

our attention. It has been asserted that a power of internal taxation in

the national legislature could never be exercised with advantage, as

well from the want of a sufficient knowledge of local circumstances, as

from an interference between the revenue laws of the Union and of the

particular States. The supposition of a want of proper knowledge seems

to be entirely destitute of foundation. If any question is depending in

a State legislature respecting one of the counties, which demands a

knowledge of local details, how is it acquired? No doubt from the

information of the members of the county. Cannot the like knowledge be

obtained in the national legislature from the representatives of each

State? And is it not to be presumed that the men who will generally be

sent there will be possessed of the necessary degree of intelligence to

be able to communicate that information? Is the knowledge of local

circumstances, as applied to taxation, a minute topographical

acquaintance with all the mountains, rivers, streams, highways, and

bypaths in each State; or is it a general acquaintance with its

situation and resources, with the state of its agriculture, commerce,

manufactures, with the nature of its products and consumptions, with the

different degrees and kinds of its wealth, property, and industry?



Nations in general, even under governments of the more popular kind,

usually commit the administration of their finances to single men or to

boards composed of a few individuals, who digest and prepare, in the

first instance, the plans of taxation, which are afterwards passed into

laws by the authority of the sovereign or legislature.



Inquisitive and enlightened statesmen are deemed everywhere best

qualified to make a judicious selection of the objects proper for

revenue; which is a clear indication, as far as the sense of mankind can

have weight in the question, of the species of knowledge of local

circumstances requisite to the purposes of taxation.



The taxes intended to be comprised under the general denomination of

internal taxes may be subdivided into those of the DIRECT and those of

the INDIRECT kind. Though the objection be made to both, yet the

reasoning upon it seems to be confined to the former branch. And indeed,

as to the latter, by which must be understood duties and excises on

articles of consumption, one is at a loss to conceive what can be the

nature of the difficulties apprehended. The knowledge relating to them

must evidently be of a kind that will either be suggested by the nature

of the article itself, or can easily be procured from any well-informed

man, especially of the mercantile class. The circumstances that may

distinguish its situation in one State from its situation in another

must be few, simple, and easy to be comprehended. The principal thing to

be attended to, would be to avoid those articles which had been

previously appropriated to the use of a particular State; and there

could be no difficulty in ascertaining the revenue system of each. This

could always be known from the respective codes of laws, as well as from

the information of the members from the several States.



The objection, when applied to real property or to houses and lands,

appears to have, at first sight, more foundation, but even in this view

it will not bear a close examination. Land taxes are co monly laid in

one of two modes, either by ACTUAL valuations, permanent or periodical,

or by OCCASIONAL assessments, at the discretion, or according to the

best judgment, of certain officers whose duty it is to make them. In

either case, the EXECUTION of the business, which alone requires the

knowledge of local details, must be devolved upon discreet persons in

the character of commissioners or assessors, elected by the people or

appointed by the government for the purpose. All that the law can do

must be to name the persons or to prescribe the manner of their election

or appointment, to fix their numbers and qualifications and to draw the

general outlines of their powers and duties. And what is there in all

this that cannot as well be performed by the national legislature as by

a State legislature? The attention of either can only reach to general

principles; local details, as already observed, must be referred to

those who are to execute the plan.



But there is a simple point of view in which this matter may be placed

that must be altogether satisfactory. The national legislature can make

use of the SYSTEM OF EACH STATE WITHIN THAT STATE. The method of laying

and collecting this species of taxes in each State can, in all its

parts, be adopted and employed by the federal government.



Let it be recollected that the proportion of these taxes is not to be

left to the discretion of the national legislature, but is to be

determined by the numbers of each State, as described in the second

section of the first article. An actual census or enumeration of the

people must furnish the rule, a circumstance which effectually shuts the

door to partiality or oppression. The abuse of this power of taxation

seems to have been provided against with guarded circumspection. In

addition to the precaution just mentioned, there is a provision that

"all duties, imposts, and excises shall be UNIFORM throughout the United

States."



It has been very properly observed by different speakers and writers on

the side of the Constitution, that if the exercise of the power of

internal taxation by the Union should be discovered on experiment to be

really inconvenient, the federal government may then forbear the use of

it, and have recourse to requisitions in its stead. By way of answer to

this, it has been triumphantly asked, Why not in the first instance omit

that ambiguous power, and rely upon the latter resource? Two solid

answers may be given. The first is, that the exercise of that power, if

convenient, will be preferable, because it will be more effectual; and

it is impossible to prove in theory, or otherwise than by the

experiment, that it cannot be advantageously exercised. The contrary,

indeed, appears most probable. The second answer is, that the existence

of such a power in the Constitution will have a strong influence in

giving efficacy to requisitions. When the States know that the Union can

apply itself without their agency, it will be a powerful motive for

exertion on their part.



As to the interference of the revenue laws of the Union, and of its

members, we have already seen that there can be no clashing or

repugnancy of authority. The laws cannot, therefore, in a legal sense,

interfere with each other; and it is far from impossible to avoid an

interference even in the policy of their different systems. An effectual

expedient for this purpose will be, mutually, to abstain from those

objects which either side may have first had recourse to. As neither can

CONTROL the other, each will have an obvious and sensible interest in

this reciprocal forbearance. And where there is an IMMEDIATE common

interest, we may safely count upon its operation. When the particular

debts of the States are done away, and their expenses come to be limited

within their natural compass, the possibility almost of interference

will vanish. A small land tax will answer the purpose of the States, and

will be their most simple and most fit resource.



Many spectres have been raised out of this power of internal taxation,

to excite the apprehensions of the people: double sets of revenue

officers, a duplication of their burdens by double taxations, and the

frightful forms of odious and oppressive poll-taxes, have been played

off with all the ingenious dexterity of political legerdemain.



As to the first point, there are two cases in which there can be no room

for double sets of officers: one, where the right of imposing the tax is

exclusively vested in the Union, which applies to the duties on imports;

the other, where the object has not fallen under any State regulation or

provision, which may be applicable to a variety of objects. In other

cases, the probability is that the United States will either wholly

abstain from the objects preoccupied for local purposes, or will make

use of the State officers and State regulations for collecting the

additional imposition. This will best answer the views of revenue,

because it will save expense in the collection, and will best avoid any

occasion of disgust to the State governments and to the people. At all

events, here is a practicable expedient for avoiding such an

inconvenience; and nothing more can be required than to show that evils

predicted to not necessarily result from the plan.



As to any argument derived from a supposed system of influence, it is a

sufficient answer to say that it ought not to be presumed; but the

supposition is susceptible of a more precise answer. If such a spirit

should infest the councils of the Union, the most certain road to the

accomplishment of its aim would be to employ the State officers as much

as possible, and to attach them to the Union by an accumulation of their

emoluments. This would serve to turn the tide of State influence into

the channels of the national government, instead of making federal

influence flow in an opposite and adverse current. But all suppositions

of this kind are invidious, and ought to be banished from the

consideration of the great question before the people. They can answer

no other end than to cast a mist over the truth.



As to the suggestion of double taxation, the answer is plain. The wants

of the Union are to be supplied in one way or another; if to be done by

the authority of the federal government, it will not be to be done by

that of the State government. The quantity of taxes to be paid by the

community must be the same in either case; with this advantage, if the

provision is to be made by the Union that the capital resource of

commercial imposts, which is the most convenient branch of revenue, can

be prudently improved to a much greater extent under federal than under

State regulation, and of course will render it less necessary to recur

to more inconvenient methods; and with this further advantage, that as

far as there may be any real difficulty in the exercise of the power of

internal taxation, it will impose a disposition to greater care in the

choice and arrangement of the means; and must naturally tend to make it

a fixed point of policy in the national administration to go as far as

may be practicable in making the luxury of the rich tributary to the

public treasury, in order to diminish the necessity of those impositions

which might create dissatisfaction in the poorer and most numerous

classes of the society. Happy it is when the interest which the

government has in the preservation of its own power, coincides with a

proper distribution of the public burdens, and tends to guard the least

wealthy part of the community from oppression!



As to poll taxes, I, without scruple, confess my disapprobation of them;

and though they have prevailed from an early period in those States[1]

which have uniformly been the most tenacious of their rights, I should

lament to see them introduced into practice under the national

government. But does it follow because there is a power to lay them that

they will actually be laid? Every State in the Union has power to impose

taxes of this kind; and yet in several of them they are unknown in

practice. Are the State governments to be stigmatized as tyrannies,

because they possess this power? If they are not, with what propriety

can the like power justify such a charge against the national

government, or even be urged as an obstacle to its adoption? As little

friendly as I am to the species of imposition, I still feel a thorough

conviction that the power of having recourse to it ought to exist in the

federal government. There are certain emergencies of nations, in which

expedients, that in the ordinary state of things ought to be forborne,

become essential to the public weal. And the government, from the

possibility of such emergencies, ought ever to have the option of making

use of them. The real scarcity of objects in this country, which may be

considered as productive sources of revenue, is a reason peculiar to

itself, for not abridging the discretion of the national councils in

this respect. There may exist certain critical and tempestuous

conjunctures of the State, in which a poll tax may become an inestimable

resource. And as I know nothing to exempt this portion of the globe from

the common calamities that have befallen other parts of it, I

acknowledge my aversion to every project that is calculated to disarm

the government of a single weapon, which in any possible contingency

might be usefully employed for the general defense and security.



[I have now gone through the examination of such of the powers proposed

to be vested in the United States, which may be considered as having an

immediate relation to the energy of the government; and have endeavored

to answer the principal objections which have been made to them. I have

passed over in silence those minor authorities, which are either too

inconsiderable to have been thought worthy of the hostilities of the

opponents of the Constitution, or of too manifest propriety to admit of

controversy. The mass of judiciary power, however, might have claimed an

investigation under this head, had it not been for the consideration

that its organization and its extent may be more advantageously

considered in connection. This has determined me to refer it to the

branch of our inquiries upon which we shall next enter.][E1]



[I have now gone through the examination of those powers proposed to be

conferred upon the federal government which relate more peculiarly to

its energy, and to its efficiency for answering the great and primary

objects of union. There are others which, though omitted here, will, in

order to render the view of the subject more complete, be taken notice

of under the next head of our inquiries. I flatter myself the progress

already made will have sufficed to satisfy the candid and judicious part

of the community that some of the objections which have been most

strenuously urged against the Constitution, and which were most

formidable in their first appearance, are not only destitute of

substance, but if they had operated in the formation of the plan, would

have rendered it incompetent to the great ends of public happiness and

national prosperity. I equally flatter myself that a further and more

critical investigation of the system will serve to recommend it still

more to every sincere and disinterested advocate for good government and

will leave no doubt with men of this character of the propriety and

expediency of adopting it. Happy will it be for ourselves, and more

honorable for human nature, if we have wisdom and virtue enough to set

so glorious an example to mankind!][E1]



PUBLIUS



1. The New England States.



E1. Two versions of this paragraph appear in different editions.