Constitutional tariffs, incidental protection, and the Laffer relationship in the early United States |
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Authors: | Phillip W Magness |
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Institution: | (1) George Mason University, 1414 Cottage Street, Vienna, VA 22180, USA |
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Abstract: | This article explores an early attempt to establish a constitutional constraint on tariffs utilizing the Laffer Curve relationship.
In 1842 John Calhoun suggested that the curve’s revenue maximization apex could be used to differentiate between “Revenue”
and “Protective” tariffs independently from the non-judiciable question of legislative motive. When admitted that a tax must
actually be collected to remain constitutionally valid, the apex functions as a de facto upper tariff rate constraint. Despite
subsequently falling in disfavor, Calhoun’s argument illustrates the importance of political economy on the constitutional
level by recognizing conditions that induce policymakers to rationally raise tax rates at the expense.
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Keywords: | Tariffs Protection Laffer Curve |
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