Federalist No. 30 was written by Alexander Hamilton under the shared pseudonym Publius and published in the New-York Packet on December 28, 1787. Its subtitle is “Concerning the General Power of Taxation.” In this essay, Hamilton begins a major run of papers defending the Constitution’s grant of national taxing power.
This paper matters because Hamilton argues that a government entrusted with national duties must have a real power to raise revenue. He says money is the “vital principle” of political life, and that without adequate revenue a government either decays into impotence or turns to plunder and arbitrary exactions. In plain terms: if a nation cannot fund itself, it cannot long govern itself.
Full Text of Federalist No. 30
Concerning the General Power of Taxation
From the New York Packet. Friday, December 28, 1787.
HAMILTON
To the People of the State of New York:
IT HAS been already observed that the federal government ought to possess the power of providing for the support of the national forces; in which proposition was intended to be included the expense of raising troops, of building and equipping fleets, and all other expenses in any wise connected with military arrangements and operations. But these are not the only objects to which the jurisdiction of the Union, in respect to revenue, must necessarily be empowered to extend. It must embrace a provision for the support of the national civil list; for the payment of the national debts contracted, or that may be contracted; and, in general, for all those matters which will call for disbursements out of the national treasury. The conclusion is, that there must be interwoven, in the frame of the government, a general power of taxation, in one shape or another.
Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions. A complete power, therefore, to procure a regular and adequate supply of it, as far as the resources of the community will permit, may be regarded as an indispensable ingredient in every constitution. From a deficiency in this particular, one of two evils must ensue; either the people must be subjected to continual plunder, as a substitute for a more eligible mode of supplying the public wants, or the government must sink into a fatal atrophy, and, in a short course of time, perish.
In the Ottoman or Turkish empire, the sovereign, though in other respects absolute master of the lives and fortunes of his subjects, has no right to impose a new tax. The consequence is that he permits the bashaws or governors of provinces to pillage the people without mercy; and, in turn, squeezes out of them the sums of which he stands in need, to satisfy his own exigencies and those of the state. In America, from a like cause, the government of the Union has gradually dwindled into a state of decay, approaching nearly to annihilation. Who can doubt, that the happiness of the people in both countries would be promoted by competent authorities in the proper hands, to provide the revenues which the necessities of the public might require?
What the consequences of this system have been, is within the knowledge of every man the least conversant in our public affairs, and has been amply unfolded in different parts of these inquiries. It is this which has chiefly contributed to reduce us to a situation, which affords ample cause both of mortification to ourselves, and of triumph to our enemies.
What remedy can there be for this situation, but in a change of the system which has produced it in a change of the fallacious and delusive system of quotas and requisitions? What substitute can there be imagined for this ignis fatuus in finance, but that of permitting the national government to raise its own revenues by the ordinary methods of taxation authorized in every well-ordered constitution of civil government? Ingenious men may declaim with plausibility on any subject; but no human ingenuity can point out any other expedient to rescue us from the inconveniences and embarrassments naturally resulting from defective supplies of the public treasury.
The more intelligent adversaries of the new Constitution admit the force of this reasoning; but they qualify their admission by a distinction between what they call internal and external taxation. The former, they say, ought to be reserved to the State governments; the latter, which they explain into commercial imposts, or rather duties on imported articles, ought to constitute the only source of revenue to the Union. Their error lies in the most absurd and extravagant presumption, that the revenues derived from consumption duties are always equal to the national wants. This is an assumption not only destitute of all foundation in reason or experience, but contradicted by the examples of most of the commercial republics.
The necessities of a nation, in every stage of its existence, will be found at least equal to its resources. Though it may at times happen that the revenues raised from consumption may answer the purposes of a state, yet it is impossible to calculate upon such a state of things as likely to continue long. As long as we can reason concerning the connexion of causes and effects, there must be a reciprocal influence between the means of national expenditure and the extent of national revenue. As the former increases or diminishes, the latter must be proportionably augmented or contracted.
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 powers, proposed to be vested in the United States by the plan of the convention, as may be considered dangerous to the public safety and have endeavored to show that they are necessary. The result of the whole is, that the Union ought to be clothed with full power to provide for every exigency of the nation, in whatever manner may be most eligible; that the circumstances which may affect the public safety are not reducible within certain determinate limits; that it is impossible safely to limit that authority, which is to provide for the defense and protection of the community, in any matter essential to its efficacy; that the common defense seems to comprehend every thing; and that the means ought to be proportioned to the end; that 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.
Observe, also, that the safety of the people must depend in the first instance on the fidelity of their rulers to the trust committed to them. In the last resort, if the abuse of power should be made the instrument of oppression, the people can have no resource left but in the exertion of that original right of self-defense which is paramount to all positive forms of government; and which against the usurpations of the national rulers may be exerted with better prospect of success than against those of the rulers of an individual state. In a single state, if the persons intrusted with supreme power become usurpers, the different parcels, subdivisions, or districts of which it consists, having no distinct government in each, can take no regular measures for defense. The citizens must rush tumultuously to arms, without concert, without system, without resource; except in their courage and despair.
But in a confederacy the people, without exaggeration, may be said to be entirely the masters of their own fate. Power being almost always the rival of power, the general government will at all times stand ready to check the usurpation of the state governments, and these will have the same disposition toward the general government. The people, by throwing themselves into either scale, will infallibly make it preponderate. If their rights are invaded by either, they can make use of the other as the instrument of redress. How wise will it be in them by cherishing the union to preserve to themselves an advantage which can never be too highly prized!
PUBLIUS.
Why Federalist No. 30 Matters
Federalist No. 30 matters because Hamilton starts the taxation sequence with a blunt proposition: national power requires national revenue. He argues that quotas and requisitions had already failed under the Articles of Confederation, and that no serious substitute existed except allowing the national government to raise its own funds by ordinary taxation.
It is also a major “means and ends” paper. Hamilton says that if the Union is expected to support armies, fleets, civil administration, public credit, and debt payment, it must have the power to meet those obligations in the real world, not just on parchment.
Related Links
- Federalist No. 30 Highlights
- Federalist Papers
- Alexander Hamilton
- Federalist No. 29
- Articles of Confederation
- United States Constitution