Federalist No. 34 was written by Alexander Hamilton under the shared pseudonym Publius and published in the Independent Journal on January 5, 1788. Its subtitle is “The Same Subject Continued: Concerning the General Power of Taxation.” In this essay, Hamilton continues defending the Constitution’s grant of federal taxing power by arguing that no fixed revenue source can be counted on forever, especially in matters tied to war, public safety, and national emergencies.
This paper matters because Hamilton takes aim at the comforting illusion that the national government can be safely confined to a narrow tax base, such as import duties alone. He argues that peace is uncertain, war expenses are unpredictable, and public necessities expand with circumstance. His larger point is brutally simple: a government responsible for national preservation cannot be denied access to the resources needed to preserve the nation.
Full Text of Federalist No. 34
The Same Subject Continued
Concerning the General Power of Taxation
For the Independent Journal.
HAMILTON
To the People of the State of New York:
I FLATTER myself it has been clearly shown in my last number, that the particular States, under the proposed Constitution, would have coequal authority with the Union in the article of revenue, except as to duties on imports. 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 advert to the inconsiderable share of the public expenses for which it will fall to the lot of the State governments to provide.
To argue upon abstract principles, that this co-ordinate authority cannot exist, is to set up supposition and theory against fact and reality. However proper such reasonings might be to show that a thing ought not to exist, they are wholly to be rejected when they are made use of to prove that it does not exist contrary to the evidence of the fact itself. It is well known that in the Roman republic the legislative authority, in the last resort, resided for ages in two different political bodies not as branches of the same legislature, but as distinct and independent legislatures, in each of which an opposite interest prevailed: in one, the patrician; in the other, the plebeian. Many arguments might have been adduced to prove the unfitness of two such seemingly contradictory authorities, each having power to annul or repeal the acts of the other. But a man would have been regarded as frantic who should have attempted at Rome to disprove their existence. It will be readily understood, that I allude to the comitia centuriata and the comitia tributa. The former, in which the people voted by centuries, was so arranged as to give a superiority to the patrician interest; in the latter, in which numbers prevailed, the plebeian interest had an entire predominancy. And yet these two legislatures coexisted for ages, and the Roman republic attained to the utmost height of human greatness. In the case particularly under consideration, there is no such contradiction as appears in the example cited; there is no power on either side to annul the acts of the other. And in practice there is little reason to apprehend any inconvenience; because, in a short course of time, the wants of the States will naturally reduce themselves within a very narrow compass; and in the interim, the United States will, in all probability, find it convenient to abstain wholly from those objects to which the particular States would be inclined to resort.
To form a more precise judgment of the true merits of this question, it will be well to advert to the proportion between the objects that will require a federal provision in respect to revenue, and those which will require a State provision. We shall discover that the former are altogether unlimited, and that the latter are circumscribed within very moderate bounds. In pursuing this inquiry, we must bear in mind that we are not to confine our view to the present period, but to look forward to remote futurity. Constitutions of civil government are not to be framed upon a calculation of existing exigencies, but upon a combination of these with the probable exigencies of ages, according to the natural and tried course of human affairs. Nothing, therefore, can be more fallacious than to infer the extent of any power proper to be lodged in the national government from an estimate of its immediate necessities. There ought to be a CAPACITY to provide for future contingencies as they may happen; and as these are illimitable in their nature, it is impossible safely to limit that capacity.
Though it is easy to assert in general terms the possibility of forming a rational judgment of a due provision against probable dangers, yet we may safely challenge those who make the assertion to bring forward their data and may affirm that they would be found as vague and uncertain as any that could be produced to establish the probable duration of the world. Observations confined to the mere prospects of internal attacks can deserve no weight; though even these will admit of no satisfactory calculation: but if we mean to be a commercial people, it must form a part of our policy to be able one day to defend that commerce. The support of a navy and of naval wars would involve contingencies that must baffle all the efforts of political arithmetic. Admitting that we ought to try the novel and absurd experiment in politics of tying up the hands of government from offensive war founded upon reasons of state, yet certainly we ought not to disable it from guarding the community against the ambition or enmity of other nations. A cloud has been for some time hanging over the European world. If it should break forth into a storm, who can insure us that in its progress a part of its fury would not be spent upon us? No reasonable man would hastily pronounce that we are entirely out of its reach. Or if the combustible materials that now seem to be collecting should be dissipated without coming to maturity, or if a flame should be kindled without extending to us, what security can we have that our tranquillity will long remain undisturbed from some other cause or from some other quarter? Let us recollect that peace or war will not always be left to our option; that however moderate or unambitious we may be, we cannot count upon the moderation, or hope to extinguish the ambition of others. Who could have imagined at the conclusion of the last war that France and Britain, wearied and exhausted as they both were, would so soon have looked with so hostile an aspect upon each other? 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 tranquillity is to calculate on the weaker springs of the human character.
What are the chief sources of expense in every government? What has occasioned that enormous accumulation of debts with which several of the European nations are oppressed? The answers plainly is, wars and rebellions; the support of those institutions which are necessary to guard the body politic against these two most mortal diseases of society. 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. In the kingdom of Great Britain, where all the ostentatious apparatus of monarchy is to be provided for, not above a fifteenth part of the annual income of the nation is appropriated to the class of expenses last mentioned; the other fourteen fifteenths are absorbed in the payment of the interest of debts contracted for carrying on the wars in which that country has been engaged, and in the maintenance of fleets and armies. If, on the one hand, it should be observed that the expenses incurred in the prosecution of the ambitious enterprises and vainglorious pursuits of a monarchy are not a proper standard by which to judge of those which might be necessary in a republic, it ought, on the other hand, to be remarked that there should be as great a disproportion between the profusion and extravagance of a wealthy kingdom in its domestic administration and the frugality and economy which in that particular become the modest simplicity of republican government. If we balance a proper deduction from one side against that which it is supposed ought to be made from the other, the proportion may still be considered as holding good.
But let us advert to the large debt which we have ourselves contracted in a single war, and let us only calculate on a common share of the events which disturb the peace of nations, and we shall instantly perceive, without the aid of any elaborate illustration, that there must always be an immense disproportion between the objects of federal and State expenditures. It is true that several of the States, separately, are encumbered with considerable debts, which are an excrescence of the late war. But this cannot happen again, if the proposed system be adopted; and when these debts are discharged, the only call for revenue of any consequence which the State governments will continue to experience will be for the mere support of their respective civil lists; to which, if we add all contingencies, the total amount in every State ought to fall considerably short of two hundred thousand pounds.
In framing a government for posterity as well as ourselves, we ought, in those provisions which are designed to be permanent, to calculate not on temporary but on permanent causes of expense. If this principle be a just one our attention would be directed to a provision in favor of the State governments for an annual sum of about two hundred thousand pounds, while the exigencies of the Union could be susceptible of no limits, even in imagination. In this view of the subject, by what logic can it be maintained that the local governments ought to command, in perpetuity, an exclusive source of revenue for any sum beyond that? To extend its power further, in EXCLUSION of the authority of the Union, would be to take the resources of the community out of those hands which stood in need of them for the public welfare, in order to put them into other hands which could have no just or proper occasion for them.
Suppose, then, the convention had been inclined to proceed upon the principle of a repartition of the objects of revenue between the Union and its members, in what could it have been better than to leave to the States an exclusive power of taxing houses and lands? There could be no objection to this, if the exclusive power of the federal government were to be confined to taxes on imports. It is impossible to conceive that the former would, alone, be equal to the public necessities. While the latter would, at any rate, have been a fund of consequence to the States. If, then, the argument for the practicability of the plan of the convention be a sound one, why does it not prove that the like plan would be still more practicable if the powers of the Union were still further abridged? But this argues too much, and can therefore prove nothing; because the practical exercise of the local power would interfere with the national power in many cases where the latter would have urgent need of exerting itself. It would be impossible to foresee or define the circumstances under which the national government might find it necessary to resort to the use of every species of tax.
The necessity of concurrent jurisdiction in certain cases has already been shown. The only question that remains is whether that concurrence should be entirely excluded from any source of taxation, except imports. It is evident that if the States are to retain any authority over objects of taxation except those duties, there can be no absolute partition. It must either be a concurrent or a conflicting jurisdiction. The plan of the Constitution avoids conflict by leaving concurrent authority broad enough to preserve state resources, while not denying the Union access to whatever means future crises may require.
PUBLIUS.
Why Federalist No. 34 Matters
Federalist No. 34 matters because Hamilton argues that constitutions must be built not just for present conditions but for the unknown demands of the future. The states, he says, will likely have relatively limited long-term fiscal needs compared with the Union, whose obligations in war, defense, commerce, and public credit are inherently uncertain and potentially immense. That is why the Constitution cannot safely confine the federal government to a narrow tax base.
It is also a major paper in the taxation sequence because Hamilton presses the case that future contingencies are illimitable, especially in national defense. This makes Federalist No. 34 one of the key essays for understanding why the Federalists rejected rigid fiscal partitions between state and national governments.
Related Links
- Federalist No. 34 Highlights
- Federalist Papers
- Alexander Hamilton
- Federalist No. 33
- United States Constitution
- Articles of Confederation