Federalist #34

Concerning the General Power of Taxation (cont.)  (Hamilton)

In Federalist Paper #34, Hamilton primarily emphasizes three central themes.  First, he conveys that the proposed Constitution would grant coequal authority (with the exception of duties on imports) and concurrent jurisdiction between the states and the Union in regard to matters of taxation and revenue.  Second, while stressing that the states should be allowed to independently provide for their own localized needs, he makes it clear that the revenue demands of the central government will always far outweigh those of the states.  And third, he plainly points out that the central government will provide for national defense and this will not only be a most necessary function, but also a most expensive one.

Hamilton begins by asserting that the coequal taxation and revenue authority can productively exist between the states and the Union and he uses the example of the two independent legislatures - one patrician, the other plebeian - of the Roman republic to support his case.  In this historic example, each legislature had the power to annul or repeal the acts of the other, but yet they coexisted for a lengthy period.  In the American example, there exists no provision for any of the involved governmental parties to annul the acts of the other, and Hamilton implies this in itself should tend to enhance the prospects for the eventual success of the arrangement.

In addressing his second dominant theme, Hamilton believes that the taxation and revenue demands of the states are - and should remain - finite whereas the demands of the Union are not amenable to such fiscal constraints and measurement.  He acknowledges the necessity of state expenses for such matters as support of the legislative, executive, and judicial branches; for the support and promotion of agricultural and manufacturing interests; and for the support of a state's domestic police.  But he then states that these expenses are "insignificant" when compared without the costs of national defense.

And Hamilton makes a compelling point in reference to this third dominant theme when he says:  "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…the chief sources of expense in every government…(are) wars and rebellions…"  He uses this as a prelude to a bit of a reinforcing summation when he says "there must always be an immense disproportion between the objects of federal and state expenditures."

In concluding, Hamilton defends the convention's adoption of the principle of concurrent jurisdiction and he argues that any subordination of one government power to the other in matters of revenue and taxation would have been less desirable to all parties.

Hamilton will continue his discussion of the "General Power of Taxation" in Federalist Paper #35.