Summary and Analysis
Section II: Advantages of Union: Federalist No. 12 (Hamilton)
A new union would increase governmental revenues and facilitate their collection. The development of commerce would make it easier not only to pay taxes, but to collect them. The greater part of national revenues should come from the imposition of customs duties and various excises, which would be "imperceptible . . . taxes on consumption."
In France, said Hamilton, 15 percent of national revenues came from import duties and domestic excises; in Britain, even more. American revenues from such sources could easily be trebled.
What should be noted here is Hamilton's statement that, in raising revenues for national governments, the levying of taxes on property and income had proved to be impractical. Hence, if the proposed constitution were adopted, the new national government would raise a large part of its revenues from customs duties, excise taxes, and similar imposts — or by what Hamilton called the "imperceptible agency of taxes on consumption," or what we now call a sales tax.