Federalist 36: A Final Word on Taxes

The Federalist Papers contains seven entries specifically addressing how our fledgling nation was to handle the delicate and potentially volatile issue of taxation.  Having touched upon Essay #30 dealing with taxation previously, let’s bookend the topic with a brief synopsis of #36  it is focusing specifically with the central government’s power of taxation: “The Same Subject Continued: Concerning the General Power of Taxation.”

The challenge of taxing a wide number of people fairly lies in the ability to ascertain who and how much to tax.  Hamilton stressed the need for a non-oppressive tax code; one which reflects the interests of diverse individuals, ranging from merchants to carpenters to blacksmiths to lawyers.  It was his hope that each individual would see the need to contribute a portion of their resources to insure continued economic growth, keeping safe a nation poised to give them the privilege of practicing trades as they saw fit and that they would be therefore more willing to comply with the taxing authority.

As Hamilton has observed, a government can be potentially be too efficient when it comes to preserving the power it has by attempting to take more power.  A heavy handed taxing authority would be an example of this. Therefore, it would be preferred to collect monies from a wide swath of workers, while simultaneously shielding the “least wealthy part of the community from oppression.”  As the nation was deemed to be a representative republic, congressional representatives selected locally should represent each district to the national government.  Ideally areas with more residents would contribute a bigger share of taxes than those which were more rural.

Hamilton vehemently opposed poll taxes whereby a “head tax” was equally levied on every adult in the community.  Though poll taxes can raise large sums of money, Hamilton criticized them as unfair burdens and would “lament to see them introduced into practice under the national government.”   Poll taxes survived in the Deep South many years until deemed unconstitutional by the Supreme Court when they were used to limit the franchise.

The taxation issue and related debates have been around for a while.  Disputes involving taxation upon the populace have existed between democratic governments as well as despotic ones.  It is Hamilton’s view that a central taxing authority was necessary for economic growth of the Nation as a whole and for the new government to be able to effectively carry out its duties.

For a country that has gone through so many economic cycles, through boom and bust, one can only wonder how Hamilton would have kept our budgets balanced today, since our government has taken on so many more responsibilities and duties than he ever would have imagined.  The size and scope of government today not only contributes to the present recession, it approaches a near crisis level of debt.   Maybe it seems simplistic, but limited government focusing on specific tasks specially authorized in the Constitution would put our nation in a much stronger financial position and ensure individual liberty for all American.

– See more at: http://www.constitutingamerica.org/blog/june-16-2010-%E2%80%93-federalist-no-36-%E2%80%93-the-same-subject-continued-concerning-the-general-power-of-taxation-from-the-new-york-packet-hamilton-%E2%80%93-guest-blogger-attorney-janice-r/#sthash.n9qyDjQ1.dpuf