Federalist No. 12 is an essay by Alexander Hamilton

Alexander Hamilton

Alexander Hamilton was a Founding Father, soldier, economist, political philosopher, one of America's first constitutional lawyers and the first United States Secretary of the Treasury...

, the twelfth of the Federalist Papers

Federalist Papers

The Federalist Papers are a series of 85 articles or essays promoting the ratification of the United States Constitution. Seventy-seven of the essays were published serially in The Independent Journal and The New York Packet between October 1787 and August 1788...

. It was published on November 27, 1787 under the pseudonym

Pseudonym

A pseudonym is a name that a person assumes for a particular purpose and that differs from his or her original orthonym...

 Publius, the name under which all the Federalist Papers were published. It is titled, "The Utility of the Union In Respect to Revenue."
In Federalist 12, Hamilton argues that the formation of the union will lead to greater wealth for the states. The government, by establishing currency, would encourage industry and all Americans would enjoy the benefits. Hamilton continues by arguing that there is no rivalry between commerce and agriculture - rather each benefits when the other prospers. Taxes should be levied on commerce and the union will be much more efficient than the states at collecting revenue. In fact, the article predicts that revenue will triple with the new federal government administering tax collection. The states have been unable to establish an adequate way to collect taxes. Hamilton claims that direct taxation is not a reality for the new government. Instead, taxes should be levied on imposts and excises, mainly on imports. Hamilton also points out that if the federal government administers tax collection instead of leaving the task to states, it will reduce the amount of resources needed to ensure that the tax is not being evaded. It will be much easier for the federal government to protect one border - the Atlantic coast - than it would be for each state to protect its borders. A few ships stationed outside of Americas ports would ensure the collection of duties. Hamilton concludes that funding the government is essential and if Americans fail to do so then the Revolution itself will have been in vain.