Federalist Paper #31 – Taxation

There are a series of papers written by Hamilton on the general power of taxation conferred upon the legislative branch of the government. In the 31st paper, Hamilton repeats the argument of those opposed to this general power. Here is their argument,

“But an indefinite power of taxation in the latter (Federal govt.) might, and probably would in time, deprive the former (State govt.) 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.”

Unfortunately, Hamilton dismissed this critique as speculatory writing, “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.”

Has this dismissal proved true? I would submit that it has not, federal taxes are greater than State taxes, and how does the State make up the difference, by appealing to the Federal government for special funds, be it for Transportation projects, Education projects, Social welfare projects or whatever else is needed. The States do not support themselves. In fact, quite the contrary, if the Federal government were to cease providing funding to the States, much of the so called “projects of social benefit” would dry up, for the people would refuse to vote for such legislators. It is only in a Federal government that has subjected the State and the State government that has aligned itself with a great funding source that produces the inefficiencies we see in our present system. Sure, I concede that the system is not as bad as it could be, but neither is it what was envisioned either.

What do you think?

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About Scott Roberts

pastor of Hope in Christ Church, Bellingham, WA
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