The Same Subject Continued (No. 35)

In Federalist number 35, Mr. Hamilton continues his dissertation on the federal taxing power. He was a finance guy, at heart, so I guess we shouldn't be surprised when he dwells so much upon the issue of taxation. Still, I understand that most of my readership are not tax attorneys or accountants. So, if you're still reading these blog posts, I thank you for your perseverance.

That said, let's see what A-Ham has to say about Uncle Sam taking your money. He addresses first the idea that the feds should only be able to tax certain things, such as imports from foreign lands. The problem with that, he says, is that a disproportionate share of tax would fall on one industry or one geographic area. The Southern states were much bigger importers of foreign good in those days than the Northern states, and would carry a heavier burden under such a system. He also notes that high tariffs would encourage smuggling, as everyone in America knew, since colonists were constantly smuggling stuff to get around British tariffs and the dreaded Navigation Act.

Hamilton is correct, I think, that broadening the tax base is fairer. Plus, as Chief Justice Marshall would later write, "the power to tax involves the power to destroy." Although tax policy was not the point of his opinion in that case, logic suggests that if you tax something, people will do it less. Booze taxes mean less drinking, but if they get high enough, people will find it profitable to make their own moonshine and take the risk of being caught. This is why I hate taxation as an influence on social policy: people will do stuff anyway, they just won't pay the tax. If something is so bad you want to stamp it out, don't tax it; make it a crime. But that's another issue.

Hamilton then addresses a completely different point: class representation in the house of Representatives. That is, he addresses the idea he calls "altogether visionary" that the representation in the House should be proportional by social class "in order to combine the interests and feelings of every part of the community, and to produce a due sympathy between the representative body and its constituents." Hamilton finds that the idea is "very specious and seducing" and "nothing but fair-sounding words."

To be honest, I was not even aware people considered this sort of thing in the eighteenth century. I think Italy had such a system under Mussolini, but I'm not certain. At any rate, until the division by social class is so stark that people could be easily divided into constituencies, it would be impossible to effect, not even addressing the problems with dividing Americans class-on-class, a vestige of the European system that our Founding Fathers sought to leave behind.

"It is said to be necessary," he writes, "that all classes of citizens should have some of their own number in the representative body, in order that their feelings and interests may be the better understood and attended to. But we have seen that this will never happen under any arrangement that leaves the votes of the people free." It is enough, I suppose, that people of any class may run for office. To require people to only vote for a member of their own income-group or profession would be a coercive and complicated system, far worse than the Constitutional system Hamilton was defending.

I don't know what any of that has to do with tax, but I don't get to choose the topics, only to discuss them.