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The Same Subject Continued: Concerning the General Power of Taxation
From the New York Packet.
Tuesday, January 1, 1788.

Author: Alexander Hamilton

To the People of the State of New York:

IN DISQUISITIONS of every kind, there are certain primary truths, or first principles, upon which all subsequent reasonings must depend. These contain an internal evidence which, antecedent to all reflection or combination, commands the assent of the mind. Where it produces not this effect, it must proceed either from some defect or disorder in the organs of perception, or from the influence of some strong interest, or passion, or prejudice. Of this nature are the maxims in geometry, that “the whole is greater than its part; things equal to the same are equal to one another; two straight lines cannot enclose a space; and all right angles are equal to each other.” Of the same nature are these other maxims in ethics and politics, that there cannot be an effect without a cause; that the means ought to be proportioned to the end; that every power ought to be commensurate with its object; that there ought to be no limitation of a power destined to effect a purpose which is itself incapable of limitation. And there are other truths in the two latter sciences which, if they cannot pretend to rank in the class of axioms, are yet such direct inferences from them, and so obvious in themselves, and so agreeable to the natural and unsophisticated dictates of common-sense, that they challenge the assent of a sound and unbiased mind, with a degree of force and conviction almost equally irresistible.

The objects of geometrical inquiry are so entirely abstracted from those pursuits which stir up and put in motion the unruly passions of the human heart, that mankind, without difficulty, adopt not only the more simple theorems of the science, but even those abstruse paradoxes which, however they may appear susceptible of demonstration, are at variance with the natural conceptions which the mind, without the aid of philosophy, would be led to entertain upon the subject. The INFINITE DIVISIBILITY of matter, or, in other words, the INFINITE divisibility of a FINITE thing, extending even to the minutest atom, is a point agreed among geometricians, though not less incomprehensible to common-sense than any of those mysteries in religion, against which the batteries of infidelity have been so industriously leveled.

But in the sciences of morals and politics, men are found far less tractable. To a certain degree, it is right and useful that this should be the case. Caution and investigation are a necessary armor against error and imposition. But this untractableness may be carried too far, and may degenerate into obstinacy, perverseness, or disingenuity. Though it cannot be pretended that the principles of moral and political knowledge have, in general, the same degree of certainty with those of the mathematics, yet they have much better claims in this respect than, to judge from the conduct of men in particular situations, we should be disposed to allow them. The obscurity is much oftener in the passions and prejudices of the reasoner than in the subject. Men, upon too many occasions, do not give their own understandings fair play; but, yielding to some untoward bias, they entangle themselves in words and confound themselves in subtleties.

How else could it happen (if we admit the objectors to be sincere in their opposition), that positions so clear as those which manifest the necessity of a general power of taxation in the government of the Union, should have to encounter any adversaries among men of discernment? Though these positions have been elsewhere fully stated, they will perhaps not be improperly recapitulated in this place, as introductory to an examination of what may have been offered by way of objection to them. They are in substance as follows:

A government ought to contain in itself every power requisite to the full accomplishment of the objects committed to its care, and to the complete execution of the trusts for which it is responsible, free from every other control but a regard to the public good and to the sense of the people.

As the duties of superintending the national defense and of securing the public peace against foreign or domestic violence involve a provision for casualties and dangers to which no possible limits can be assigned, the power of making that provision ought to know no other bounds than the exigencies of the nation and the resources of the community.

As revenue is the essential engine by which the means of answering the national exigencies must be procured, the power of procuring that article in its full extent must necessarily be comprehended in that of providing for those exigencies.

As theory and practice conspire to prove that the power of procuring revenue is unavailing when exercised over the States in their collective capacities, the federal government must of necessity be invested with an unqualified power of taxation in the ordinary modes.

Did not experience evince the contrary, it would be natural to conclude that the propriety of a general power of taxation in the national government might safely be permitted to rest on the evidence of these propositions, unassisted by any additional arguments or illustrations. But we find, in fact, that the antagonists of the proposed Constitution, so far from acquiescing in their justness or truth, seem to make their principal and most zealous effort against this part of the plan. It may therefore be satisfactory to analyze the arguments with which they combat it.

Those of them which have been most labored with that view, seem in substance to amount to this: “It is not true, because the exigencies of the Union may not be susceptible of limitation, that its power of laying taxes ought to be unconfined. Revenue is as requisite to the purposes of the local administrations as to those of the Union; and the former are at least of equal importance with the latter to the happiness of the people. It is, therefore, as necessary that the State governments should be able to command the means of supplying their wants, as that the national government should possess the like faculty in respect to the wants of the Union. But an indefinite power of taxation in the LATTER might, and probably would in time, deprive the FORMER of the means of providing for their own necessities; and would subject them entirely to the mercy of the national legislature. As the laws of the Union are to become the supreme law of the land, as it is to have power to pass all laws that may be NECESSARY for carrying into execution the authorities with which it is proposed to vest it, the national government might at any time abolish the taxes imposed for State objects upon the pretense of an interference with its own. It might allege a necessity of doing this in order to give efficacy to the national revenues. And thus all the resources of taxation might by degrees become the subjects of federal monopoly, to the entire exclusion and destruction of the State governments.”

This mode of reasoning appears sometimes to turn upon the supposition of usurpation in the national government; at other times it seems to be designed only as a deduction from the constitutional operation of its intended powers. It is only in the latter light that it can be admitted to have any pretensions to fairness. The moment we launch into conjectures about the usurpations of the federal government, we get into an unfathomable abyss, and fairly put ourselves out of the reach of all reasoning. Imagination may range at pleasure till it gets bewildered amidst the labyrinths of an enchanted castle, and knows not on which side to turn to extricate itself from the perplexities into which it has so rashly adventured. Whatever may be the limits or modifications of the powers of the Union, it is easy to imagine an endless train of possible dangers; and by indulging an excess of jealousy and timidity, we may bring ourselves to a state of absolute scepticism and irresolution. I repeat here what I have observed in substance in another place, that all observations founded upon the danger of usurpation ought to be referred to the composition and structure of the government, not to the nature or extent of its powers. The State governments, by their original constitutions, are invested with complete sovereignty. In what does our security consist against usurpation from that quarter? Doubtless in the manner of their formation, and in a due dependence of those who are to administer them upon the people. If the proposed construction of the federal government be found, upon an impartial examination of it, to be such as to afford, to a proper extent, the same species of security, all apprehensions on the score of usurpation ought to be discarded.

It should not be forgotten that a disposition in the State governments to encroach upon the rights of the Union is quite as probable as a disposition in the Union to encroach upon the rights of the State governments. What side would be likely to prevail in such a conflict, must depend on the means which the contending parties could employ toward insuring success. As in republics strength is always on the side of the people, and as there are weighty reasons to induce a belief that the State governments will commonly possess most influence over them, the natural conclusion is that such contests will be most apt to end to the disadvantage of the Union; and that there is greater probability of encroachments by the members upon the federal head, than by the federal head upon the members. But it is evident that all conjectures of this kind must be extremely vague and fallible: and that it is by far the safest course to lay them altogether aside, and to confine our attention wholly to the nature and extent of the powers as they are delineated in the Constitution. Every thing beyond this must be left to the prudence and firmness of the people; who, as they will hold the scales in their own hands, it is to be hoped, will always take care to preserve the constitutional equilibrium between the general and the State governments. Upon this ground, which is evidently the true one, it will not be difficult to obviate the objections which have been made to an indefinite power of taxation in the United States.

PUBLIUS.

Wednesday, June 9th, 2010

“IN DISQUISITIONS of every kind, there are certain primary truths, or first principles, upon which all subsequent reasonings must depend. These contain an internal evidence which, antecedent to all reflection or combination, commands the assent of the mind.”

Federalist No. 31 has one of the strongest beginnings and endings of any of the essays I have read so far.  Hamilton begins by reminding us of the importance of “primary truths,” and “first principles.”  When our elected officials are guided by the first principles and truths upon which our country was founded, our freedom and prosperity will be protected.

Mr. Cooper makes an excellent point in his essay today, that instead of scrutinizing specific tasks the government takes on, our elected officials should start from the macro level, and apply first principles in every decision, asking the question, “is this task a legitimate function of the federal government?”

After laying out the importance of the guiding truths in discerning the legitimate functions of government, Hamilton makes the case for the federal government having the “unqualified power of taxation,” so it has the resources to fulfill those duties and powers for which it is responsible, according to the Constitution.

Our modern day problem is that the federal government has utilized its power to tax, to fund powers far beyond the scope of those enumerated in the Constitution.

Hamilton could not imagine the federal government’s modern day usurpation of powers because the checks and balances the founders designed were meant to curb governmental encroachment.  Indeed, because of the power of the states in selecting U.S. Senators (before the adoption of the 17th Amendment), Hamilton envisioned States more likely to usurp federal powers, than the other way around.

Hamilton closes by reminding us that the responsibility to stop the encroachment of government at the state or federal level, rests with the people, thus ending Federalist 31 as strongly as he opens it.  “We the people”  must keep government within its proper scope and powers “delineated in the Constitution.” He states that the people “hold the scales in their hands,” and hopes they “will always take care to preserve the constitutional equilibrium between the general and the State governments.”

“Everything beyond this must be left to the prudence and firmness of the people; who, as they will hold the scales in their own hands, it is to be hoped, will always take care to preserve the constitutional equilibrium between the general and the State governments.”

How will “We The People,” adjust the scales to bring the constitutional equilibrium back into balance?  It is clear the founders expect us to.

Good night and God Bless,

Cathy Gillespie

 

Wednesday, June 9th, 2010

Howdy from Boston! It is thrilling to be here in a city that has so much revolutionary history! Juliette and I walked around in the rain and saw State Hall and Park Church. (Be sure to watch our behind the scene video!) We also saw the graves of Samuel Adams, Paul Revere and John Hancock. I spoke Samuel Adam’s words over his grave, “The pooling of property and redistributing of wealth are despotic and unconstitutional.” The bells then started to ring from Park Church so I said recited it again!

As I read Federalist Paper No. 31, I felt such a since of wonder and also such a sense of gratitude that I am having this opportunity to read the words of Publius. Understanding their interpretation of the United States Constitution and their vision of the country is empowering and incredibly relevant.

I am most intrigued with how the structure and checks and balances of our then newfound government were founded with such reason and based on the guidance and wisdom of history. As I read and digest their words, I am realizing how far we have strayed from their original intent. One of the ways is with the seventeenth amendment. This was a pivotal part of the balance of government. The seventeenth amendment was one of the ways that the states could keep their power. The senate was to represent the states and the house the people.

I wonder if the healthcare bill would have ever passed if the Senate had been left in its original intent? I also wonder if the Federal Government would ever have had the opportunity to become so vast and powerful if the Senators had continued to be elected by the state legislatures? Who has been looking after the states’ interest since the passing of the 17th Amendment?

The Federalist Papers reveal that Publius and our Constitutional forefathers never intended for the federal government to become so intrusive into the states’ rights, the states’ affairs or citizens’ lives. Alexander Hamilton writes in Federalist Paper No. 31, “I repeat here what I have observed in substance in another place, that all observations, founded upon the danger of usurpation, ought to be referred to the composition and structure of the government, not to the nature and extent of its powers. The state governments, by their original constitution, are invested with complete sovereignty.”

Do our states have complete sovereignty today?

Another interesting statement in Federalist Paper No. 31 is: “As in republics, strength is always on the side of the people; and as there are weighty reasons to induce a belief, that the state governments will commonly possess most influence over them, the natural conclusion is, that such contests will be most apt to end to the disadvantage of the union; and that there is greater probability of encroachments by the members upon the federal head, than by the federal head upon the members.”

Is this true today? I say it is not true today.

Alexander Hamilton’s last paragraph of Federalist Paper No. 31, is our call to action, “Everything beyond this, must be left to the prudence and the firmness of the people; who, as they will hold the scales in their own hands, it is to be hoped, will always take care to preserve the constitutional equilibrium between the general and the state governments.”

“Everything beyond this must be left to the prudence and the firmness of the people; AS THEY HOLD THE SCALES IN THEIR OWN HANDS..” This quote has a tremendous amount of treasure. We, the American people must have prudence and firmness in regard to our governmental affairs. Publius talks often about the “genius of the people.” We should not underestimate ourselves. We should call upon our prudence in governmental affairs and we should be firm. The best way to do this is to be vocal and to vote. We the people rule… through our elected officials.

When I think about the shift in power in our governmental structure and checks and balances, I think about how our founding fathers would be greatly distressed. I, also, ponder upon the political environment during the years around 1913. Why was this amendment allowed to happen? Were our predecessors not firm, informed or prudent?

Of course, this will very likely be the thought process that our grandchildren may have about our generation? “Why did they allow our liberties to be constrained, our country to be diminished, by living beyond their means?”

It was we, the American people, who were to hold the scales in our hands. It was we who were to preserve the constitutional equilibrium between the general and the state governments. We the people. If our country fails it is because we the people have let it. Benjamin Franklin, when asked what he had constructed for the people during the Constitutional Convention, responded, “A republic, if you can keep it.”

Do our children know that they are the, “we the people?”
Or do they think it is the, “we the government?”

It is by our actions, education and involvement that they will see the true intent of our founding fathers, our United States Constitution and a government of the people, by the people, for the people. May it not perish from the earth.

God Bless,

Janine Turner

 

Guest Blogger: Horace Cooper, Director of the Center for Law and Regulation at the Institute for Liberty

Federalist #31 continues on the topic of the taxing power of the new central government.  Contrasting his significant math and science knowledge with his considered skepticism about humankind generally, Hamilton suggests basic maxims ought to apply as a principle for government’s effective operation.  Just as the maxims in geometry, that “the whole is greater than its part; things equal to the same are equal to one another; two straight lines cannot enclose a space; and all right angles are equal to each other, Hamilton asserts that in ethics and politics, that there cannot be an effect without a cause; that the means ought to be proportioned to the end; that every power ought to be commensurate with its object; that there ought to be no limitation of a power destined to effect a purpose which is itself incapable of limitation.  In other words instead of putting the focus on the means of a particular government activity, greater attention should be paid to whether the purpose is a legitimate one or not.

Rather than merely scrutinizing the technique by which the central government carries out it task say, bailing out automobile manufacturers, Hamilton suggests greater consideration be given to whether it is a legitimate function of the federal government to concern itself with the success or failure of car manufacturers.  A government ought to contain in itself every power requisite to the full accomplishment of the objects committed to its care, and to the complete execution of the trusts for which it is responsible, free from every other control but a regard to the public good and to the sense of the people.

Unless one is particularly scrupulous as to what responsibilities are assigned to the federal government, Hamilton’s view of seemingly unlimited powers of the federal government particularly in the area of taxing authority comes across as audacious and perhaps even dangerous.  However, it is clear upon review that the real danger lies in not carefully assigning duties and responsibilities of the central government.

One key charge of the new government was and remains today, national defense.  In the context of taxation, Hamilton asks how national security can really be put in the hands of the central government if it does not have the ability to call upon the resources, as it needs to carry out its duties.  This is no spurious charge.  One serious problem with the Articles of Confederation is that ostensibly the National Congress had responsibility for national defense, in practice it could not pay for or mandate the carrying out of many of its foreign policy priorities.  Over time this reality could prove quite provocative to the enemies of the new country in America.

Hamilton sees that taxing authority is critical to carrying out national security responsibilities.  As revenue is the essential engine by which the means of answering the national exigencies must be procured, the power of procuring that article in its full extent must necessarily be comprehended in that of providing for those exigencies.

In the military context, this argument is perhaps most powerful.  Nevertheless, even outside of that arena one can contemplate areas of responsibility (such as the administration of justice) in which it is necessary to focus on the importance of the objective and therefore loosening the limits on methods.  If the area of responsibility is appropriate, Hamilton argued that the central government needed the taxing authority to carry out the responsibility.

Critics charged that a general taxing authority for the federal government would make it difficult for states to raise the resources they need for their responsibilities, as the taxes of the federal government would tend to crowd out the resources needed by the states.  It is true that excessive taxation would have that effect, but not necessarily taxation generally.  Hamilton recognizes that there will be legitimate responsibilities that government should carryout.  If those are excessively funded or there are duties undertaken greater than the legitimate responsibilities that government should have, the flaw is not with taxing authority but instead with the government’s makeup or its design.  I repeat here what I have observed in substance in another place, that all observations founded upon the danger of usurpation ought to be referred to the composition and structure of the government, not to the nature or extent of its powers.

Powers split among a bicameral legislature along with an executive and judicial branch each with unique and overlapping authorities providing a check and balance against each other resulting in a greater protection of liberty for all the citizens will do more than a limit on the type of taxation policy.

Hamilton closes essay #31 with an observation that reveals a great amount of prescience for such a young man.  He says that the same risks that could lead to a national government over-reaching in its power and authority over the people existed just as well with the state government.  While at the time it was nearly universally assumed that state governments — being close to the people — would never overstep their bounds, it appears today that composition and structure matter just as much as the state level as it does at the local level.  Modern state governments have taken on most if not more of the duties of the central government’s welfare state with far fewer organizational or structural restrictions on doing so than exist at the federal level.  Taking the opposite view of Hamilton, many states have balanced budget requirements but no formal limits on the types of duties that it may assume.  Often as a result the residents in these “ambitious” states are extremely overtaxed.  States like Texas and to a lesser degree Florida have far more limits on the accepted tasks of the state government and their residents are taxed less.  Nevertheless, regardless of one’s concerns about the lack of formal limits on taxation in the constitution, Hamilton concludes it is by far the safest course to lay them altogether aside, and to confine our attention wholly to the nature and extent of the powers as they are delineated in the Constitution. Every thing beyond this must be left to the prudence and firmness of the people; who, as they will hold the scales in their own hands, it is to be hoped, will always take care to preserve the constitutional equilibrium between the general and the State governments.

Horace Cooper is the Director of the Center for Law and Regulation at the Institute for Liberty

Wednesday, June 9th, 2010