Federalist No. 12 Explained: Where the Money Comes From

The Federalist Papers: Explained · Jun 4, 2026 · 28m

Every government runs on money — and Federalist No. 12 is Alexander Hamilton's blunt, brilliant answer to where that money actually comes from. He argues that a government can only tax wealth that moves, that cash-poor America could never be funded by direct taxes on land, and that the one workable tax is a quiet duty on imported trade, collected at the ports. But there is a catch that turns out to be the whole point of the paper: those duties can only be collected if America stays one country, because a divided continent of open land borders would either lose the revenue to smuggling or need…