It does not appear that an attempt was made by any one [at the constitutional convention] to define the exact meaning of the language employed [the term “direct taxes”].
In the twenty-first number of the Federalist, Alexander Hamilton, speaking of taxes generally, said:
"Those of the direct kind, which principally relate to land and buildings, may admit of a rule of apportionment. Either the value of the land or the number of the people may serve as a standard."
The thirty-sixth number of that work, by the same author, is devoted to the subject of internal taxes. It is there said, "They may be subdivided into those of the direct and those of the indirect kind." In this connection land taxes and poll taxes are discussed. The former are commended and the latter are condemned. Nothing is said of any other direct tax. In neither case is there a definition given or attempted of the phrase "direct tax."…
Hamilton left behind him a series of legal briefs, and among them one entitled "Carriage tax." See vol. vii. p. 848, of his works. This paper was evidently prepared with a view to the Hylton case, in which he appeared as one of the counsel for the United States. In it he says:
"What is the distinction between direct and indirect taxes? It is a matter of regret that terms so uncertain and vague in so important a point are to be found in the Constitution. We shall seek in vain for any antecedent settled legal meaning to the respective terms. There is none. We shall be as much at a loss to find any disposition of either which can satisfactorily determine the point."
There being many carriages in some of the states, and very few in others, he points out the preposterous consequences if such a tax be laid and collected on the principle of apportionment instead of the rule of uniformity. He insists that if the tax there in question was a direct tax, so would be a tax on ships, according to their tonnage. He suggests that the boundary line between direct and indirect taxes be settled by "a species of arbitration," and that
direct taxes be held to be only "capitation or poll taxes, and taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate. All else must, of necessity, be considered as indirect taxes."
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