Friday, April 13, 2012

Taxation in the Federalist Papers

I'm reading a little in The Federalist Papers, that wonderful collection of essays written by three of our Founding Fathers in 1787-88. The purpose was to convince New York, a large and key state, to vote in favor of the Constitution, already written by the convention but not yet ratified by enough states to become the supreme law of the land. John Jay, James Madison, and Alexander Hamilton were the authors, though they were all published with the pen name of Publius.

I've read some of this in the past, especially when I was researching for Documenting America. At least two chapters in that were based on The Federalist Papers (without looking I can't remember how many chapters I finally decided on). And, I read a couple of them concerning the judiciary branch of government as I've been researching The Candy Store Generation.

My other objective in reading them is to participate in the book discussion group concerning them at Goodreads. I joined the history group at Goodreads for a couple of reasons. One, I like history—no, I love history. Two, I hope someday to be able to promote my own history related books there. But to do so without active participation is spamming. So, I'm participating in that book group towards both ends.

Federalist #34 is one of the current topics and, though I'm a little late to the party, I finally read the paper and made a couple of comments. I may make a couple more. Though the discussion there has moved on to other numbers of The Federalist Papers, discussion on prior threads is permissible.

In this one Alexander Hamilton is arguing in favor of the Constitution not including a division of taxing authority between the Feds and the States, excepting in the matter of import duties. His reasons for this are: 1) who knows what might happen in the future, so the Constitution needs to be flexible on this point; and 2) the revenue needs of the States will be small in proportion of the Feds, and any division will reserve so much revenue to the States that the Feds might not be able to raise enough in times of war.

These are interesting points, and I shall have to ponder them some more. For sure Hamilton was correct in his projection that the revenue needs at the Federal level far outstrip the needs at the State level. Here are some interesting quotes from the paper.

“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 develop the inconsiderable share of the public expenses for which it will fall to the lot of the State governments to provide.”

“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.”

"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 tranquility would be to calculate on the weaker springs of the human character."

Was Hamilton a seer? He sure had it right about how the revenue needs of the Federal government would come to overpower the States, even though he couldn't possibly have foreseen we would eventually become a predominately urban society with a whole different set of needs from the rural society of his day.

I believe I will take a few minutes and write a chapter of a future Documenting America: Constitution Edition. This will make the most of current research, even if I don't get to that volume for several years.


Gary said...

Has anyone translated that 18th century language into modern vernacular? I find I have to translate and reduce the verbosity before trying to understand what is written. This is off-putting to anyone who just wants the meaning and is willing to sacrifice the decoration.

David A. Todd said...


I know Glen Beck was working on that, but don't remember if it has been published or not. It's a good idea.