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Federalist Paper No. 32
The Same Subject Continued
(Concerning the General Power of Taxation)
From the Daily Advertiser.
Thursday, January 3, 1788.
HAMILTON
To the People of the State of New York.
ALTHOUGH I am of opinion that there would be no real danger of the consequences
which seem to be apprehended to the State governments from a power in the Union to control
them in the levies of money, because I am persuaded that the sense of the people, the
extreme hazard of provoking the resentments of the State governments, and a conviction of
the utility and necessity of local administrations for local purposes, would be a complete
barrier against the oppressive use of such a power; yet I am willing here to allow, in its
full extent, the justness of the reasoning which requires that the individual States
should possess an independent and uncontrollable authority to raise their own revenues for
the supply of their own wants. And making this concession, I affirm that (with the sole
exception of duties on imports and exports) they would, under the plan of the convention,
retain that authority in the most absolute and unqualified sense; and that an attempt on
the part of the national government to abridge them in the exercise of it, would be a
violent assumption of power, unwarranted by any article or clause of its Constitution.
An entire consolidation of the States into one complete national sovereignty
would imply an entire subordination of the parts; and whatever powers might remain in
them, would be altogether dependent on the general will. But as the plan of the convention
aims only at a partial union or consolidation, the State governments would clearly retain
all the rights of sovereignty which they before had, and which were not, by that act,
EXCLUSIVELY delegated to the United States. This exclusive delegation, or rather this
alienation, of State sovereignty, would only exist in three cases: where the Constitution
in express terms granted an exclusive authority to the Union; where it granted in one
instance an authority to the Union, and in another prohibited the States from exercising
the like authority; and where it granted an authority to the Union, to which a similar
authority in the States would be absolutely and totally CONTRADICTORY and REPUGNANT. I use
these terms to distinguish this last case from another which might appear to resemble it,
but which would, in fact, be essentially different; I mean where the exercise of a
concurrent jurisdiction might be productive of occasional interferences in the POLICY of
any branch of administration, but would not imply any direct contradiction or repugnancy
in point of constitutional authority. These three cases of exclusive jurisdiction in the
federal government may be exemplified by the following instances: The last clause but one
in the eighth section of the first article provides expressly that Congress shall exercise
"EXCLUSIVE LEGISLATION" over the district to be appropriated as the seat of
government. This answers to the first case. The first clause of the same section empowers
Congress "TO LAY AND COLLECT TAXES, DUTIES, IMPOSTS AND EXCISES"; and the second
clause of the tenth section of the same article declares that, "NO STATE SHALL,
without the consent of Congress, LAY ANY IMPOSTS OR DUTIES ON IMPORTS OR EXPORTS, except
for the purpose of executing its inspection laws." Hence would result an exclusive
power in the Union to lay duties on imports and exports, with the particular exception
mentioned; but this power is abridged by another clause, which declares that no tax or
duty shall be laid on articles exported from any State; in consequence of which
qualification, it now only extends to the DUTIES ON IMPORTS. This answers to the second
case. The third will be found in that clause which declares that Congress shall have power
"to establish an UNIFORM RULE of naturalization throughout the United States."
This must necessarily be exclusive; because if each State had power to prescribe a
DISTINCT RULE, there could not be a UNIFORM RULE.
A case which may perhaps be thought to resemble the latter, but which is in
fact widely different, affects the question immediately under consideration. I mean the
power of imposing taxes on all articles other than exports and imports. This, I contend,
is manifestly a concurrent and coequal authority in the United States and in the
individual States. There is plainly no expression in the granting clause which makes that
power EXCLUSIVE in the Union. There is no independent clause or sentence which prohibits
the States from exercising it. So far is this from being the case, that a plain and
conclusive argument to the contrary is to be deduced from the restraint laid upon the
States in relation to duties on imports and exports. This restriction implies an admission
that, if it were not inserted, the States would possess the power it excludes; and it
implies a further admission, that as to all other taxes, the authority of the States
remains undiminished. In any other view it would be both unnecessary and dangerous; it
would be unnecessary, because if the grant to the Union of the power of laying such duties
implied the exclusion of the States, or even their subordination in this particular, there
could be no need of such a restriction; it would be dangerous, because the introduction of
it leads directly to the conclusion which has been mentioned, and which, if the reasoning
of the objectors be just, could not have been intended; I mean that the States, in all
cases to which the restriction did not apply, would have a concurrent power of taxation
with the Union. The restriction in question amounts to what lawyers call a NEGATIVE
PREGNANT that is, a NEGATION of one thing, and an AFFIRMANCE of another; a negation of the
authority of the States to impose taxes on imports and exports, and an affirmance of their
authority to impose them on all other articles. It would be mere sophistry to argue that
it was meant to exclude them ABSOLUTELY from the imposition of taxes of the former kind,
and to leave them at liberty to lay others SUBJECT TO THE CONTROL of the national
legislature. The restraining or prohibitory clause only says, that they shall not, WITHOUT
THE CONSENT OF CONGRESS, lay such duties; and if we are to understand this in the sense
last mentioned, the Constitution would then be made to introduce a formal provision for
the sake of a very absurd conclusion; which is, that the States, WITH THE CONSENT of the
national legislature, might tax imports and exports; and that they might tax every other
article, UNLESS CONTROLLED by the same body. If this was the intention, why not leave it,
in the first instance, to what is alleged to be the natural operation of the original
clause, conferring a general power of taxation upon the Union? It is evident that this
could not have been the intention, and that it will not bear a construction of the kind.
As to a supposition of repugnancy between the power of taxation in the States
and in the Union, it cannot be supported in that sense which would be requisite to work an
exclusion of the States. It is, indeed, possible that a tax might be laid on a particular
article by a State which might render it INEXPEDIENT that thus a further tax should be
laid on the same article by the Union; but it would not imply a constitutional inability
to impose a further tax. The quantity of the imposition, the expediency or inexpediency of
an increase on either side, would be mutually questions of prudence; but there would be
involved no direct contradiction of power. The particular policy of the national and of
the State systems of finance might now and then not exactly coincide, and might require
reciprocal forbearances. It is not, however a mere possibility of inconvenience in the
exercise of powers, but an immediate constitutional repugnancy that can by implication
alienate and extinguish a pre-existing right of sovereignty.
The necessity of a concurrent jurisdiction in certain cases results from the
division of the sovereign power; and the rule that all authorities, of which the States
are not explicitly divested in favor of the Union, remain with them in full vigor, is not
a theoretical consequence of that division, but is clearly admitted by the whole tenor of
the instrument which contains the articles of the proposed Constitution. We there find
that, notwithstanding the affirmative grants of general authorities, there has been the
most pointed care in those cases where it was deemed improper that the like authorities
should reside in the States, to insert negative clauses prohibiting the exercise of them
by the States. The tenth section of the first article consists altogether of such
provisions. This circumstance is a clear indication of the sense of the convention, and
furnishes a rule of interpretation out of the body of the act, which justifies the
position I have advanced and refutes every hypothesis to the contrary.
PUBLIUS.
(Continue to Page 33)
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