Federalist No. 21
In Federalist No. 21, Hamilton returns to the helm to discuss other defects of the present Confederation. His goal is to proceed in the enumeration of the most important of those defects which have hitherto disappointed our hopes from the system established among ourselves.
The next most palpable defect of the subsisting Confederation, is total want of a SANCTION to its laws. The United States, as now composed, have no powers to exact obedience, or punish disobedience to their resolutions. There is no express delegation of authority to them to use force against delinquent members. As a result, the Confederation provided us with another example of an extraordinary spectacle of a government destitute even of the shadow of constitutional power to enforce the execution of its own laws. This puts it in a weak position relative to the powers of Europe.
The want of a mutual guaranty of the State governments is another capital imperfection in the federal plan. This is a rather sad state of affairs as, without a guarantee, the assistance to be derived from the Union in repelling those domestic dangers which may sometimes threaten the existence of the State constitutions, must be renounced. Usurpation may rear its crest in each State, and trample upon the liberties of the people, while the national government could legally do nothing more than behold its encroachments with indignation and regret.
The principle of regulating the contributions of the States to the common treasury by QUOTAS is another fundamental error in the Confederation. Not only does this result in an inadequate supply of the national exigencies, but it can weaken the overall economy. IN addition, since the wealth of nations depends upon an infinite variety of causes, this implies that there can be no common measure of national wealth and, of course, no general or stationary rule by which the ability of a state to pay taxes can be determined. As a result, the attempt to regulate the contributions of the members of a confederacy by any such rule, cannot fail to be productive of glaring inequality and extreme oppression. The inequality would of itself be sufficient in America to work the eventual destruction of the Union. The reality is that there is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way.
The suggestion put forth is that these taxes should be levied on articles of consumption, as they contain in their own nature a security against excess. They prescribe their own limit, which cannot be exceeded without defeating the end proposed.