Tax After The American War Of Independence

Hans Gribnau (Tilburg) & Jane Frecknall Hughes (Nottingham; Google Scholar), Tax after the American War of Independence: A Consideration of The Federalist and The Anti-Federalist Papers in Studies in the History of Tax Law, Vol. 11 (Peter Harris (Cambridge) & Dominic de Cogan (Cambridge) eds.  2023):

The American War of Independence ended formally with the Versailles peace treaty of 1783 —– leaving 13 independent states needing a constitution. Tax played a key role in the lead-up to and during the War and in subsequent years, notably in the debate about the newly-developed Constitution. That debate is captured in The Federalist Papers and The Anti-Federalist Papers.

The Federalist Papers comprise articles written by Founding Fathers James Madison, Alexander Hamilton and John Jay, aimed at promoting acceptance of the new Constitution, and explaining and justifying the political principles it embodied. Key — and highly controversial — issues were the separation of powers between the judiciary, the legislature and the executive, and the concept of federalism. Numbers 30–36 of The Federalist Papers, written by Hamilton, concern taxation. Although not opposed to individual state taxation, Hamilton aimed to persuade readers that federal taxation was required to provide public necessities. Particularly contentious was the relationship between state tax law and any federal imposition and their respective standing.

The views of the Federalists were countered by The Anti-Federalist Papers. The Anti-Federalists opposed ratification of the Constitution, though they too favoured federalism: they wanted a ‘small republic’ (a weak central government), as opposed to a ‘big republic’, fearing that a national government would be too powerful and threaten individual liberties and state government. The Anti-Federalist Papers are liberally peppered with detailed arguments about taxation, with numbers 30–36 being devoted entirely to tax. Of concern was the federal power to tax, which they wanted limited to taxing overseas imports.

In this paper, we will examine the background to The Federalist and Anti-Federalist Papers in terms of the philosophical ideas (e.g. Locke, Hume, Montesquieu, Paine, Rousseau) about tax leading to the War, the taxes imposed during and after the War and influences on tax policy-making. Both the Federalists and the Anti-Federalists cited the great political philosophers or showed their influence in their support or otherwise for the taxing powers incorporated into the Constitution in regard to the rule of law, consent and custom.