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Constitutional tariffs incidental protec

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Const Polit Econ DOI 10.1007/s10602-008-9060-6 ORIGINAL PAPER Constitutional tariffs, incidental protection, and the Laffer relationship in the early United States Phillip W. Magness  Springer Science+Business Media, LLC 2008 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. Keywords Tariffs  Protection  Laffer Curve JEL Classification H20  K10  N41  N71  F13 1 Introduction Arthur Laffer’s famous sketch on a napkin at a Washington restaurant in the early 1970s makes an interesting anecdote in the conceptual history of economics. The Laffer Curve’s theorized tax rate-revenue relationship has since become a staple of supply-side tax policy and produced a formal literature on its potential applications.1 Yet Laffer’s diagram was not unknown prior to the nap ...
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