The Same Subject Continued: Concerning the General Power of Taxation
From the Daily Advertiser.
Thursday, January 3, 1788.

Author: Alexander 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.


Friday, June 11th, 2010

Thank you to Professor Knipprath for your excellent insight into Federalist No. 32.  We greatly appreciate your generous gift of time to the 90 in 90: History Holds the Key to the Future Project!

The purpose of Federalist 32 seems to be to reassure citizens that the Federal Government’s power to tax will not preclude states from raising the revenue they need to operate their state governments. While making that point, Publius gives us an excellent tutorial in the balance of power that exists between the federal government and the states, under the Constitution:

“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 sounds very much like the language in the 10th Amendment:

Amendment X: The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Publius goes on to explain the three types of cases where the Federal government is granted exclusive authority, overriding state sovereignty:

(1)  “Where the Constitution in express terms granted an exclusive authority to the Union;

(2) where it granted in one instance an authority to the Union, and in another prohibited the States from exercising the like authority;

(3) 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.

Making it clear that states will be allowed to levy taxes on “all other articles,” except imports and exports, Publius does caution that it might not always be prudent for the federal government and states to exercise their concurrent taxation powers and tax the same articles, but that “an inconvenience of the exercise of powers” doesn’t “extinguish a pre-existing right….”  Most people would agree that modern day levels of taxation at the state and federal levels have passed the point of prudence!

The balance of power between the federal and state governments Hamilton describes in the beginning of the essay was structured to ensure our freedom.  The disturbance in the equilibrium of the balance of power between the federal and state governments has resulted in greater levels of taxation at the state and federal levels, thus limiting our personal financial freedom and damaging the economy.

As unfunded federal mandates on the state governments have grown, the states’ need to raise revenue has increased. lists only nine states without an income tax! As the states’ need to raise revenue has increased, they have become more and more dependent on federal dollars, with mandates attached, thus altering the balance of power even more. As the federal government has ventured in to areas our founders never intended, its need to raise revenue has increased as well.

Once again, we see the damage done by disturbing the delicate balance of power so artfully designed by our founding fathers.  The more we learn about the original structure and design of our government, the better equipped we are to work to restore the equilibrium which protects our liberty.

Good night and God Bless,

Cathy Gillespie


Howdy from Boston, well, really Quincy and Cambridge!
Juliette and I had an amazing day. It was a day devoted to one of our most influential founding fathers, John Adams.

We started our day with a trip to Quincy, sections of which used to be named Braintree. We visited John Adam’s very modest childhood home and then a few cobblestones away, the small, simple home where John lived with his brilliant wife, Abigail.

I was mesmerized when I saw the tiny desk where Abigail wrote all of her letters to John throughout the Revolutionary war. My sense of awe was rekindled when the Park Ranger recounted the story of how Abigail, realizing her son’s promise, and realizing the needs of her future country, sent her ten-year-old son abroad with John. She knew the experience would give him a wealth of knowledge  – a knowledge that America would need in her future leaders. John and John Quincy traveled across the Atlantic in February. Their ship hit hurricane force winds and was struck by lightning and four crewmen died.

Abigail was and is an example of a wife and mother who knew no bounds of fortitude and selflessness. This is why I wrote about her in my book, “Holding Her Head High.”
A statue of Abigail Adams with her son John Quincy, who would become our 6th President, was in the town square. Inscribed on the statue were her words: “Improve your understanding for acquiring useful knowledge and virtue such as will render you an ornament to society an honor to your country and a blessing to your parents.” She is an inspiration for me as a patriot and a mother.

In John and Abigail’s first home was an even smaller desk than Abigail’s It was on this desk that John wrote the Massachusetts’s Constitution. Included in his draft of the Constitution for the Commonwealth of Massachusetts were: three branches of government, a bi-cameral legislature, a supreme court of the land, as well as, a list of “rights”. I would like to study the Massachusetts’s Constitution. The fact that the states had their own constitutions before the United States Constitution holds a revelatory poignancy to the modern day debate regarding states’ rights.

In Federalist Paper No. 32, Alexander Hamilton argues a point regarding the levies of money and the states’ power:
“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.”

This statement illuminates, once again, the original intent of the federal government, which was to respect the state’s rights and to be a federal power held to accountability through the checks and balances of both the people and the states.

After Juliette and I visited the original homestead of John and Abigail Adams, we visited Peacefield. Peacefield was the home of John and Abigail Adams after the war. In this home I saw the original furnishings: dishes, chairs, paintings and thousands of John Quincy’s original books on exhibit in the land’s first library – the John Quincy Adam’s Library. A poignant point that resonated through the experience of visiting their homesteads was sacrifice – a sense of duty for their country. John and Abigail were willing to put themselves in great peril – a peril based on value, faith and righteousness.

It is worthy to note that John Adams was chosen to be the one to represent America in England as our first ambassador. John Adams walked in to greet the king, the king who wanted to hang him, and announced that he was there to represent our new country – the United States of America. I am also in awe of the fact that it was John Adams who so valiantly fought for the Declaration of Independence and suggested that Thomas Jefferson write it. It was John Adams who nominated George Washington to be the General of the Revolutionary army. It was John Adams who, on his own accord and literally on his own, traveled to Amsterdam and negotiated a 3 million dollar loan for the our revolutionary army who had no shoes and were suffering tremendously. It was John Adams who was one of the five who negotiated the magnificent Treaty of Paris that ended the Revolutionary War. It was John Adams who predicted that the French revolution would be a bloodbath that would end in tyrannical government. The list goes on and on.

John Adams is truly an American hero. May we teach our children about his great genius, sacrifice and dedication to our country. May he be an example of what it is to be a selfless American patriot. When Juliette and I visited the room, which held the tombs of John Adams and Abigail Adams, John Quincy Adams and Louisa Catherine Adams, I was overcome with emotion. In this room, as tears flowed down my cheeks, the director of the Church of the Presidents, Arthur W. Ducharme, told me how important “Constituting America” was to the future of our country. It was a moment I will never forget.

God Bless,

Janine Turner

Thursday, June 10th, 2010

Guest Blogger: Joerg Knipprath, Professor of Law at Southwestern Law School

In various essays, the reader has met Alexander Hamilton, polemicist; in Federalist No. 32, Alexander Hamilton, constitutional lawyer, takes a turn. The topic is whether the power to tax granted to the national government under Article I, Section 8, clause 1, of the Constitution deprives states of the power to tax. In a logical and (mostly) clear progression of premises and conclusions rooted in classic exegesis of the Constitution, Hamilton lays out the argument that the state and national governments have concurrent powers to tax. The matter of “exclusive” and “concurrent” powers is an exploration of the mechanics of our federalism.

From the perspective of government, the power to tax is an essential aspect of sovereignty and self-determination. Our personal experience tells us that dependence on others for funds makes one less fully autonomous and in control of one’s life. Just as an invigoration of Congress’s power to tax was an essential part of the Philadelphia Convention’s mission, retaining the power to tax is essential to state sovereignty, and Hamilton seeks to assuage concerns on that point.

Powers granted to the national government are exclusive only if the Constitution says so (such as the power to make laws for the District of Columbia), if the power is expressly prohibited to the states in some manner (such as the states’ lack of power to tax imports and exports), or if a reservation of the same power to the states would be “absolutely and totally contradictory and repugnant” [italics in original] to the national government’s exercise of the power. All other powers are concurrent, and any conflict between the governments over whether one should tax an activity that the other is already taxing is merely a matter of pragmatic policy. Based on the language of the clause that grants the power to tax to the national government, and the clause in Article I, Section 10, that expressly prohibits the states from taxing imports and exports without Congress’s assent, Hamilton concludes that the power to tax is concurrent, not exclusive.

Today, interpreting powers as concurrent is preferred. That maximizes the residual sovereignty of the states. But, since it does nothing to reduce the powers of the national government, reading a power as concurrent merely multiplies the layers of (often duplicative) government regulations, as, for example, applicants for many types of permits know well.

Hamilton’s argument seems so clear, one wonders why he even made the effort. The answer lies in the sophisticated attacks from the Antifederalists that foretell of political conflict over the practical ability of both the national government and the states to seek tax revenues from the same sources, and over the broader issue of overlapping powers in this novel federal system.

The opponents, led by “Brutus,” see a deeper constitutional problem rooted in an inevitable grab for power by a national government that will seek ever-greater amounts of revenue, to the detriment of the states.“The power to tax is the power to destroy,” as Chief Justice Marshall would write later in McCulloch v. Maryland. Ultimately, the individuals or assets taxed will bear no further assessments. At that point, Brutus predicts, the national government will use the taxing power, the necessary and proper clause, and the supremacy clause to pass laws to gain pre-eminent access to available revenues and to preclude the states from gaining revenues needed to maintain their governments.

While one may question whether such a dire scenario will ever play itself out at a constitutional level through explicit federal legislation to prohibit state taxes (or whether such a law would even be constitutional), it is already happening indirectly. The national government’s hunger for tax revenues is becoming more voracious as ever more aspects of individual lifestyle choices are transferred to national bureaucracies. That leaves the states increasingly hard-pressed to find sources for taxes not yet tapped to the hilt by Congress, though it must be recognized that California politicians, at least, seem to be very creative in finding new turnips from which to squeeze figurative blood.

The national government has long exercised control over the states by distributing to them grants subject to conditions intended to induce state compliance with federal mandates. Those grants are funded through taxes that, if the national government did not levy them, would be available to the states, which could spend the revenues raised without needing to comply with federal mandates. This creeping control over state sovereignty through the taxing and spending powers is one aspect of the lawsuit by various state attorneys-general against the recently-adopted health care reform law.

Hamilton also contrasts the situation of an exclusive federal power where no state participation in the area is constitutionally permitted, with the case where, though the states have concurrent power constitutionally with the national government to legislate, there are “occasional interferences in the policy [italics in original] of any branch of administration [that] would not imply any direct contradiction…of constitutional authority.” A slightly modified version of the latter is the current interpretation of Congress’s expansive power to regulate interstate commerce. That power is concurrent, and the states are able, within broad limits, to regulate interstate commerce through, for example, inspection laws and truck weight regulations.

Congress also can pass laws under its constitutional powers that, under the supremacy clause, override (“preempt”) the states’ otherwise proper concurrent regulations. It was precisely this type of scenario that Brutus raised in his alarm about the effect of the Congress’s taxing power on the states’ power to raise revenue. Hamilton has not directly addressed that argument in Federalist No. 32. He attempts a response in the next essay.

An expert on constitutional law, Prof. Joerg W. Knipprath has been interviewed by print and broadcast media on a number of related topics ranging from recent U.S. Supreme Court decisions to presidential succession. He has written opinion pieces and articles on business and securities law as well as constitutional issues, and has focused his more recent research on the effect of judicial review on the evolution of constitutional law.  Prof. Knipprath has also spoken on business law and contemporary constitutional issues before professional and community forums.  His website is

Thursday, June 10th, 2010