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Direct Taxes.

May 6, 1794.

Mr. SEDGWICK said, that, in forming a constitution for a national government, to which was intrusted the preservation of that government, and of the existence of society itself, it was reasonable to suppose that every mean necessary to those important ends should be granted. This was in fact the case in the Constitution of the United States. To Congress it was expressly granted to impose "taxes, duties, imposts, and excises." It had been universally concluded, and never, to his knowledge, denied, but that the legislature, by those comprehensive words, had authority to impose taxes on every subject of revenue. If this position was just, a construction which limited their operation of this power (in its nature and by the Constitution illimitable) could not be the just construction.

He observed that, to obviate certain mischief, the Constitution had provided that capitation and other direct taxes should be proportioned according to the ratio prescribed in it. If, then, the legislature was authorized to impose a tax on every subject of revenue, (and surely pleasure carriages, as an object of luxury, and in general owned by those to whom contributions would not be inconvenient, were fair and proper subjects of taxation,) and a tax on them could not be proportioned by the constitutional ratio, it would follow, irresistibly, that such a tax, in this sense of the Constitution, was not "direct." On this idea he enlarged his reasoning, and showed that such a tax was incapable of apportionment.

He said that, so far as he had been able to form an opinion, there had been a general concurrence in a belief that the ultimate sources of public contributions were labor, and the subjects and effects of labor; that taxes, being permanent, had a tendency to equalize, and to diffuse themselves through a community. According to these opinions, a capitation tax, and taxes on land, and on property and income generally, were a direct charge, as well in the immediate as ultimate sources of contribution. He had considered those, and those only, as direct taxes in their operation and effects. On the other hand, a tax imposed on a specific article of personal property, and particularly of objects of luxury, as in the case under consideration, he had never supposed had been considered a direct tax within the meaning of the Constitution. The exaction was indeed directly of the owner; but by the equalizing operation, of which all taxes more or less partook, it created an indirect charge on others besides the owners.


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