Summary
The power of the government to act on behalf of the national security should
only be bounded by the needs of the nation and the resources. Since this is
partially determined through the amount of revenue available, the ability of the
government to gain revenue must not be hindered by anything except for the power
of the people represented in the legislative branch.
A serious flaw of the Articles of Confederation was that although it
gave Congress the responsibility for managing the needs of the confederacy,
it did not provide the means to do so. The government did not have the power to
directly collect taxes. Relying on requisitions and quotas from the state did
not fill the national treasury, and threatened to ruin the public credit.
The government's authority to tax should not be limited. The government should
know the full extent of its resources and then judge the necessity of taking
loans. This allows a nation to plan proactively for its prosperity and defense.
Creditors are also more likely to loan to a country that has full authority to
summon resources on its own, rather than being subject to the authority of 13
other decisions about the feasibility and speed of repaying those loans.
Critics claim that internal taxation should be the sole authority of local
government, and that revenues collected from trade should go to the federal
government. However, this policy not only places the federal government in
subordinate position to the states, but forces them to either be in a continual
state of not having enough money to provide for security and prosperity or to be
continually relying on the states.
Other critics have suggested that the federal government should be limited to
taxing only certain objects. However, these objects would bear an unfair burden,
the industry that is focused on would be unfairly taxed and the taxes would fall
unfairly amongst society and the separate states. For example, if the national
government could only tax imports, not only would this be an unfair burden on
the merchant class, but also an unfair advantage to the manufacturing states.
New York would especially suffer under this set of circumstances.
The current plan of government includes a concurrent tax system, in which both
the federal and the state governments maintain the authority to tax, except in
the case of imports and exports which are exclusively restricted from state's
authority.
