With respect to the impost I conceive it to be justly exceptionable, because that an estimation ad valorem is arbitrary, and the law ought in all cases to be clear and explicit. The impost on prizes need not, I should suppose, be asked for, because Congress may take measures for the purpose themselves whenever the occasion requires. I conceive also, that a tax might be laid on exports which, without being burdensome, would still be productive. Enclosed is a list of rates, which I take the liberty to submit. I cannot go into a written detail of the reasons for them, because my time will not permit.
I am told that the principal objection to a land tax is the inequality. To obviate this objection (although I cannot accede to the force of it) perhaps a reduction of the sum from one dollar to a quarter of a dollar per hundred acres might be expedient; and to supply the deficiency, a tax on houses might be adopted, according to the enclosed rate, which I also beg leave to submit.
I must take the liberty to declare my most serious apprehensions from the existence of unsettled accounts among the States. Everything which tends to create or continue them is fraught with ruinous consequences. Keeping accounts of moneys paid by taxes of the States, and liquidating those accounts by after settlements, will, I fear, prove the source of much dissension. It will operate as heretofore in preventing the States from paying anything. I would pray therefore to submit to Congress the following mode of terminating all present accounts, viz. that the whole sum paid or expended by each State, for the public service from the commencement of the war, should be placed to the credit of the particular State, and each draw interest on such sum. By these means the whole account would be equitably settled in the first instance. The States which are indebted on their own private account, would be able to wipe off such debts by an assignment of national stock. And on the first requisitions made by Congress for current expenditures, each might make payment either in part, or perhaps in the whole, by a discharge of so much of the debt. Thus a degree of simplicity would be introduced into our affairs, and we might avoid the horrors of intestine convulsions.