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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
 Unionτthat 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%n1%n 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.
PUBLIUS.
 The New England States
.