The Articles of Confederation (1781-1789)

When raising an army to defend the United States, each state legislature has the authority to name all colonels and lesser officers in any way they choose to lead the troops recruited from that state.

The common treasury will supply any money needed to pay for war or to defend the country, when allowed by Congress. Each state has the responsibility of contributing to the common treasury based on the relative value of all the land within that state. Congress will determine the method of surveying land and estimating the total value per state. The taxes to support the common treasury will be made and collected by each state legislature by a date decided by Congress.

Probably the most taboo topic throughout the duration of the American Revolution was taxation. Because it served as the impetus that brought the colonists to declare their independence from Great Britain, "taxation without representation" was a rallying cry that few forgot when visualizing their ideal government.

Most agreed that taxation was necessary to support a stable government. However, they also believed that the power to tax should be in the hands of the government that represents the people. Since the radicals had successfully placed sovereignty solidly in the state governments, people accepted, in theory, the right of the state legislature to levy taxes. However, they outright rejected the possibility of a central government levying any sort of taxes whatsoever.

Since one of the primary purposes of the Confederation Congress was to provide for mutual defense, it also had to establish a financial means to support its purpose. Hamstrung without the power to tax, Congress relied on requisitions of money from each state. Powerless to enforce its requisitions, Congress and the administrators of finance often resorted to begging states to pay. While this served to substantially weaken the ability of Congress to carry out its few responsibilities, it also reflected the unresolved debate of how states should be taxed.

One of the most divisive debates that occurred in the ratification process of the Articles of Confederation was the means by which the amount of a state's tax contribution would be determined. This issue was also closely linked to representation in congress and the requisitioning of troops. At issue was the means by which political and economic power would be measured. For the purposes of taxation, Congress had to decide whether labor or land was the best indicator of economic strength. This debate between land and labor faced head-on the issue of sectionalism and slavery.

Northern states had well-cultivated and productive land, but southern states had tremendous labor resources in the form of slavery. Southern states also held immense tracts of land, but they did not have the same productivity value of northern states because they were not as densely populated or cultivated. In order to protect its own best interests, states supported the means of taxation that required them to pay the least taxes.

Northern states argued that taxation should be based on the number of laborers in each state, including slaves, because only through labor is land turned into economic value. Southern states countered this argument by stating slaves were property, and unless Northern states agreed to count their horses and cows for the taxation purposes, slaves could not be fairly counted. Aside from this obviously derogatory statement about the nature of slavery, the southern point of view clearly demonstrates that they would count slaves if it was to their advantage for representation purposes, but not when it would take a large chunk out of their profit from slavery.

Southern states strongly argued that it was the value of property that determined the potential wealth of a state, because property was more permanent than laborers. The land argument put the burden of taxation on the Northerners, who obviously resented that they would have to shoulder the burden of debt while the lucrative southern industry of cash crops would continuously prosper. Congress retained the power to determine the value of land, and therefore determine the relative contribution of taxes from each state. However, without the power to enforce the collection of taxes, which was a sole power of the state, Congressional finances became a large and problematic issue under the Articles of Confederation.