In Jefferson's final address to Congress, he considered the likelihood that soon the surpluses of revenue would continue to accumulate. Jefferson posed the question about what to do with this revenue. "Shall it lie unproductive in the public vaults? Shall the revenue be reduced?" No, rather President Jefferson wanted to spend the additional revenue to improve the road, canals, rivers and education. He suggested that perhaps, Congress already had the power to do so, but if not, they should amend the Constitution. The words are right there, President Thomas Jefferson suggested that taxes be maintained at a higher than necessary level to spend on public works projects. Here are his exact words to Congress in 1808.
"The probable accumulation of the surpluses of revenue beyond what can be applied to the payment of the public debt whenever the freedom and safety of our commerce shall be restored merits the consideration of Congress. Shall it lie unproductive in the public vaults? Shall the revenue be reduced? Or shall it not rather be appropriated to the improvements of roads, canals, rivers, education, and other great foundations of prosperity and union under the powers which Congress may already possess or such amendment to the Constitution as may be approved by the States? While uncertain of the course of things, the time may be advantageously employed in obtaining the powers necessary for a system of improvement, should that be thought best."
Public Works? Was Thomas Jefferson suggesting that government should use tax revenue for more than just the basic government functions and paying back it's loans. Was he really pushing to expand the role of government through taxes and spending?
Five years after leaving office in 1813, Jefferson explained his position in a letter to Virginia Congressman John Wayles Eppes. In this letter, Jefferson explained that up until now (1813) the objects of finance in the US, had been simply to provide for the support of the government and to pay the revolutionary war debts. Taxes were mostly on luxury items which had rarely affected the poor. Jefferson wrote that it was the "fondest wishes" of his heart to use the surplus portions of these taxes on "canals, roads and useful institutions, literary or others". Jefferson explained, that an amendment to the constitution would have been necessary to do this. But, the taxes should be continued only on an annual or bi-annual basis not in perpetuity. The ability to tax in perpetuity would lead to corruption and dishonesty in government. Therefore, no tax should every be yielded for a term longer than that of Congress. Furthermore, this revenue should be used for public works only after the federal debt is extinguished. Jefferson clearly stated that the current generation is not authorized to "saddle posterity with our debts". He said, that we are morally bound to pay for any wars, or projects within our lifetimes, and not leave the debt to our children.
So yes, Thomas Jefferson wanted to expand the role of government to tax and spend it on public works projects. But he wanted it to be spelled out in the constitution, paid for by tax laws that expire, and not saddle the future generations with debt. He understood the dangers and addiction of spending, and wanted Congress to put in place the proper checks and balances to avoid this. Today, it is clear that this never did happen.
http://www.presidency.ucsb.edu/ws/index.php?pid=29450
The Works of Thomas Jefferson: Correspondence and Papers, 1808-1816, pages 306-310
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