FEDERALIST No. 32

The Same Subject Continued

(Concerning the General Power of Taxation)

From the Daily Advertiser.

Thursday, January 3, 1788.

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 PREGNANTgthat 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.