A Few Notes on Federalist 21 by A. Hamilton

The theme of Federalist 21 is reasons why the Articles of Confederation should be replaced as the written constitution for the new United States of America.

Alexander Hamilton, writing as "Publius" in December 1787, complains that the Articles of Confederation do not provide for "sanction to its laws." That is, the United States does not have "powers to exact obedience, or punish disobedience" to its "resolutions." The U.S. has therefore a government "destitute even of the shadow of constitutional power to enforce the execution of its own laws."

The United States has no power to repel "those domestic dangers which may sometimes threaten the existence of the State constitutions." Hamilton then offers a specific example, Shays' Rebellion:

The tempestuous situation from which Massachusetts has scarcely emerged, evinces that dangers of this kind are not merely speculative. Who can determine what might have been the issue of her late convulsions, if the malcontents had been headed by a Caesar or by a Cromwell? Who can predict what effect a despotism, established in Massachusetts, would have upon the liberties of New Hampshire or Rhode Island, of Connecticut or New York?

Beyond that, the way in which the Articles of Confederation provide for any sort of revenue for the national treasury is also defective. The quota system, according to which a state pays according to its
relative size in land or population, is not a fair system. A state's ability to pay is not based on its relative value of its land or the number of people who live there. A comparison among European nations would illustrate this. The same principle applies to the various counties of a single state.

The only solution is to grant the federal government "to raise its own revenues in its own ways." Hamilton suggests a selection of excise or consumption taxes according to which "the rich may be extravagant" and "the poor can be frugal."

[In the State of Texas today, consumers pay taxes on items like candy, snacks, and soda. They also pay tax on restaurant meals. But they do not pay tax on unprepared foods from a grocery store. Things like fresh fruit and raw vegetables are tax free].