Why was it a problem that Congress did not have the power to tax under the Articles of Confederation?

The Articles of Confederation established the first governmental structure unifying the 13 colonies that had fought in the American Revolution. This document created the structure for the confederation of these newly minted 13 states. After many attempts by several delegates to the Continental Congress, a draft by John Dickinson of Pennsylvania was the basis for the final document, which was adopted in 1777. The Articles went into effect on March 1, 1781, after each of the 13 states had ratified them. The Articles of Confederation lasted until March 4, 1789, when they were replaced by the U.S. Constitution. They had lasted for just eight years.

In response to widespread antipathy toward a strong central government, the Articles of Confederation kept national government weak and allowed for the states to be as independent as possible. But almost soon as the Articles took effect, problems with this approach became apparent. 

The purpose of the Articles of Confederation was to create a confederation of states whereby each state retained "its sovereignty, freedom, and independence, and every power, jurisdiction, and right...not...expressly delegated to the United States in Congress assembled." 

Every state was as independent as possible within the central government of the United States, which was only responsible for the common defense, the security of liberties, and the general welfare. Congress could make treaties with foreign nations, declare war, maintain an army and navy, establish a postal service, manage Indigenous affairs, and coin money. But Congress could not levy taxes or regulate commerce.

Because of widespread fear of a strong central government at the time they were written and strong loyalties among Americans to their own state as opposed to any national government during the American Revolution, the Articles of Confederation purposely kept the national government as weak as possible and the states as independent as possible. However, this led to many of the problems that became apparent once the Articles took effect. 

Despite their significant weaknesses, under the Articles of Confederation the new United States won the American Revolution against the British and secured its independence; successfully negotiated an end to the Revolutionary War with the Treaty of Paris in 1783; and established the national departments of foreign affairs, war, marine, and treasury. The Continental Congress also made a treaty with France in 1778, after the Articles of Confederation had been adopted by the Congress but before they had been ratified by all the states.

The weaknesses of the Articles would quickly lead to problems that the Founding Fathers realized would not be fixable under the current form of government. Many of these issues were brought up during the Annapolis convention of 1786. These included: 

• Each state only had one vote in Congress, regardless of size.
• Congress did not have the power to tax.
• Congress did not have the power to regulate foreign and interstate commerce.
• There was no executive branch to enforce any acts passed by Congress.
• There was no national court system or judicial branch.
• Amendments to the Articles of Confederation required a unanimous vote.
• Laws required a 9/13 majority to pass in Congress.
• States could levy tariffs on other states' goods.

Under the Articles of Confederation, each state viewed its own sovereignty and power as paramount to the national good. This led to frequent arguments between the states. In addition, the states would not willingly give money to financially support the national government.

The national government was powerless to enforce any acts that Congress passed. Further, some states began to make separate agreements with foreign governments. Almost every state had its own military, called a militia. Each state printed its own money. This, along with issues with trade, meant that there was no stable national economy. 

In 1786, Shays' Rebellion occurred in western Massachusetts as a protest against rising debt and economic chaos. However, the national government was unable to gather a combined military force among the states to help put down the rebellion, making clear a serious weakness in the structure of the Articles.

As the economic and military weaknesses became apparent, especially after Shays' Rebellion, Americans began asking for changes to the Articles. Their hope was to create a stronger national government. Initially, some states met to deal with their trade and economic problems together. However, as more states became interested in changing the Articles, and as national feeling strengthened, a meeting was set in Philadelphia on May 25, 1787. This became the Constitutional Convention. The gathered delegates realized that changes would not work, and instead, the entire Articles of Confederation needed to be replaced with a new U.S. Constitution that would dictate the structure of the national government. 

More of a treaty—or a "firm league of friendship"—than a constitution, the Articles of Confederation in no way infringed upon the sovereignty of the original thirteen states. Each state held "its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not by this confederation expressly delegated to the United States, in Congress assembled." The Congress, the primary organ of the new national government, only had the power to declare war, appoint military officers, sign treaties, make alliances, appoint foreign ambassadors, and manage relations with the American Indians. All states were represented equally in Congress, and nine of the thirteen states had to approve a bill before it became law. Amendments required the approval of all the states.

The Articles of Confederation represented an attempt to balance the sovereignty of the states with an effective national government. Under the Articles, the states, not Congress, had the power to tax. Congress could raise money only by asking the states for funds, borrowing from foreign governments, and selling western lands. In addition, Congress could not draft soldiers or regulate trade. There was no provision for national courts or a chief executive.

Importantly, the Articles did not establish a genuinely republican government. Power was concentrated in a single assembly, rather than being divided, as in the state governments, into separate houses and branches. Further, members of the Confederation Congress were selected by state governments, not by the people.

The Articles served as the nation’s plan of government until the US Constitution was ratified in 1788.

A full transcript is available.

Excerpts

ARTICLES

Of Confederation and perpetual Union between the States of New-Hampshire, Massachusetts-Bay, Rhode Island and Providence Plantations, Connecticut, New-York, New-Jersey, Pennsylvania, Delaware, Maryland, Virginia, North-Carolina, South-Carolina and Georgia.

ARTICLE 1.
The Stile of this confederacy shall be "The United States of America".

ART. II.
Each state retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not by this confederation expressly delegated to the United States, in Congress assembled.

ART. III.
The said states hereby severally enter into a firm league of friendship with each other, for their common defense, the security of their liberties, and their mutual and general welfare, binding themselves to assist each other, against all force offered to, or attacks made upon them, or any of them, on account of religion, sovereignty, trade, or any other pretense whatever.

ART. IV.
The better to secure and perpetuate mutual friendship and intercourse among the people of the different states in this union, the free inhabitants of each of these states, paupers, vagabonds, and fugitives from justice excepted, shall be entitled to all privileges and immunities of free citizens in the several states; and the people of each state shall have free ingress and regress to and from any other state, and shall enjoy therein all the privileges of trade and commerce, subject to the same duties, impositions, and restrictions as the inhabitants thereof respectively, provided that such restrictions shall not extend so far as to prevent the removal of property imported into any state, to any other state, of which the owner is an inhabitant; provided also that no imposition, duties or restriction shall be laid by any state, on the property of the united states, or either of them.

If any person guilty of, or charged with, treason, felony, or other high misdemeanor in any state, shall flee from justice, and be found in any of the united states, he shall, upon demand of the Governor or executive power of the state from which he fled, be delivered up and removed to the state having jurisdiction of his offense.

Full faith and credit shall be given in each of these states to the records, acts, and judicial proceedings of the courts and magistrates of every other state.

ART. V.
For the more convenient management of the general interests of the united states, delegates shall be annually appointed in such manner as the legislature of each state shall direct, to meet in congress on the first Monday in November, in every year, with a power reserved to each state to recall its delegates, or any of them, at any time within the year, and to send others in their stead, for the remainder of the year. . . .

In determining questions in the united states in congress assembled, each state shall have one vote.

Freedom of speech and debate in congress shall not be impeached or questioned in any court or place out of congress, and the members of congress shall be protected in their persons from arrests or imprisonments, during the time of their going to and from, and attendence on congress, except for treason, felony, or breach of the peace. . . .