Federalist 30 Summary Written by Donald Mellon
The Federalist Papers Summary No 30: Hamilton
December 28, 1787
This paper begins a discussion of the need for the Union to raise sufficient revenue through taxes to allow for the execution of its responsibilities. The national government’s responsibilities are supporting the national forces and civil list, payment of the national debts, and all matters requiring disbursements out of the national treasury. “The present confederation, feeble as it is, intended to repose in the United States an unlimited power of providing for the pecuniary wants of the Union”. All well and good but as mentioned it relied upon the States to provide the funds rather than the Union taxing directly which must now be changed.
Critics argue that the Union can lay duties on imported goods but all other “internal” taxes are the province of the individual States. This would be an inadequate source to give the national government the power to execute the enumerated responsibilities now and of even less adequacy as the country grows. To say that the shortfall could be made up by the States ignores the lessons provided by the current plan under the Articles.
A country always in need of additional revenue is always in danger. Assuming revenue was adequate in peace time what would happen in war? Funds would be diverted to fighting the war thus neglecting other responsibilities and if no additional taxes could be implemented the country’s credit would falter. The need to borrow from foreign countries to pursue the war would increase just as our means of repaying debt decreased. Loans if obtained would have enormous premiums. “The power of creating new funds upon new objects of taxation by its own authority would enable the national government to borrow as far as its necessities might require.” Future papers will discuss these new objects of taxation.
