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Federalist 30-36: This Government Was Made For Taxin'. And That's Just What It'll Do.

The farther I read into the Federalist Papers, the more I'm convinced the Tea Partiers only know about half their history.

Back up: I didn't start reading the Federalists with the aim of debunking the Tea Partiers. But it's impossible to read historical documents about the nature of governance in America when there's a coalition of folks out there who so strongly identify with those historical personages.

Their narrative, I believe, goes something like this: America was born, essentially, in a tax rebellion. And the Founding Fathers then created a limited government in order to avoid oppressing the people either with burdensome taxes or directly tyrannical rule. And maybe, just maybe, if the tax burden gets too large -- well, maybe, Americans have the right to resort to rebellion again.

Like I said: I think that's only partly right. Because the Federalist Papers -- the documents we most use, aside from the Constitution itself, for insight into the Founders' thinking -- seem to favor a rather more expansive vision of government than the Tea Party narrative would suggest.

I already mentioned this theory back in Federalist 15. But it's' greatly reinforced by reading Alexander Hamilton in Federalist 30 through 36.

Why? Because those chapters are about the topic nearest and dearest to the hearts of Tea Partiers: Taxation.

And get this: Hamilton was arguing that the power to tax was a central reason -- maybe the central reason -- the Constitution needed to be passed. And not just any power to tax: Unlimited power to tax.

This kind of goes against the narrative we hear lately, but there it is in Hamilton's own words: Without unlimited power to tax, the government will be a weak and ineffective thing.

How is it possible that a government half supplied and always necessitous, can fulfill the purposes of its institution, can provide for the security, advance the prosperity, or support the reputation of the commonwealth? How can it ever possess either energy or stability, dignity or credit, confidence at home or respectability abroad? How can its administration be any thing else than a succession of expedients temporizing, impotent, disgraceful? How will it be able to avoid a frequent sacrifice of its engagements to immediate necessity? How can it undertake or execute any liberal or enlarged plans of public good?

Now, Hamilton was speaking from some experience here: A reason the Articles of Confederation were considered to have failed was that the Congress under the articles couldn't raise its own money -- it had to ask the states, essentially. And the states weren't always forthcoming. That left the United States unable to expeditiously pay its debts from the Revolutionary War.

Here's where honesty compels me to note, though, that Hamilton's call for unlimited power of taxation -- and I'm serious here: he wanted it to be unlimited -- didn't seem to be in the service of creating a welfare state, but rather to pay for the common defense. (Federalist 34: "The expenses arising from those institutions which are relative to the mere domestic police of a state, to the support of its legislative, executive, and judicial departments, with their different appendages, and to the encouragement of agriculture and manufactures (which will comprehend almost all the objects of state expenditure), are insignificant in comparison with those which relate to the national defense.")

But unlimited power is, of course, unlimited power. And that's what Hamilton was arguing for. Here he is in Federalist 31:

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.

This, of course, was horrifying to the antifederalists. And -- not to drive the point home with too much earnestness -- it was horrifying to them in a way that today's Tea Partiers would find very familiar. Here's "Brutus" writing in Antifederalist 32:

We may say then that this clause commits to the hands of the general legislature every conceivable source of revenue within the United States, Not only are these terms very comprehensive, and extend to a vast number of objects, but the power to lay and collect has great latitude; it will lead to the passing a vast number of laws, which may affect the personal rights of the citizens of the states, expose their property to fines and confiscation, and put their lives in jeopardy. It opens a door to the appointment of a swarm of revenue and excise collectors to prey upon the honest and industrious part of the community, [and] eat up their substance. . . .

If you're a Tea Partier, that sounds like a fairly accurate description of what happened, I suppose.

But the antifederalists were wrong, to some extent. They were concerned, it seems, with preserving a fair measure of state sovereignty -- "state's rights" you might say -- and their biggest worry about the Constitution's grant of unlimited power to tax was that it would, over time, deprive the states of their power to tax. It hasn't really worked out that way.

In the end, Hamilton rejected every suggested limitation to restrict Congress' power to tax. The only real check, he suggested, was the voters themselves -- and their ability to send to Congress wise people who would understand how to balance the needs of government against the income of its citizens.

There is no part of the administration of government that requires extensive information and a thorough knowledge of the principles of political economy, so much as the business of taxation. The man who understands those principles best will be least likely to resort to oppressive expedients, or sacrifice any particular class of citizens to the procurement of revenue. It might be demonstrated that the most productive system of finance will always be the least burdensome. There can be no doubt that in order to a judicious exercise of the power of taxation, it is necessary that the person in whose hands it should be acquainted with the general genius, habits, and modes of thinking of the people at large, and with the resources of the country. And this is all that can be reasonably meant by a knowledge of the interests and feelings of the people. In any other sense the proposition has either no meaning, or an absurd one. And in that sense let every considerate citizen judge for himself where the requisite qualification is most likely to be found.

Two-hundred years later, the only question I can ask is: How's that working out for ya?

Comments

namefromthepast said…
Publius repeatedly visits the topic of taxation and says taxing the inferior number is redistribution (#10)warns against direct taxation(#12), argues that tax revenue goes down when taxes are too high(#21)Any new regulation or tax slows economic growth(#62), and offers that the less burdensome tax rates create the greater the tax revenue(#35)

Defense and more pointedly defending freedom, prosperity and security are the only reasons for unleashing unlimited taxation. That certainly is not the aim of our left wing administration and that's why the teaparty continues momentum.

Hamilton says that a considerate citizenry should judge tax rates.
Other than a precious few who really considers this?

Maybe just property and business owners should be able to vote? That's what Hamilton also had in mind.

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