Constitutional tariffs, incidental protection, and the Laffer relationship in the early United States

  • Phillip W. Magness
Original Paper


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.


Tariffs Protection Laffer Curve 

JEL Classification

H20 K10 N41 N71 F13 



The author would like to extend his thanks and gratitude to Professors Jack High, Kenneth A. Reinert, and Gordon Tullock for their helpful feedback and suggestions for this paper.


  1. Besci, Z. (2000). The shifty Laffer Curve. Federal Reserve Bank of Atlanta Economic Review, 85, 53–64.Google Scholar
  2. Blinder, A. S. (1981). Thoughts on the Laffer Curve. In L. H. Meyer (Ed.), The supply-side effects of economic policy (pp. 81–92). Center for the Study of American Business, Washington University St. Louis and the Federal Reserve Bank of St. Louis.Google Scholar
  3. Buchanan, J. M., & Lee, D. R. (1982). Politics, time, and the Laffer Curve. Journal of Political Economy, 90(4), 816–819.CrossRefGoogle Scholar
  4. Canto, V. A., Joines, D. H., & Laffer, A. B. (1983). Foundations of supply-side economics: Theory and evidence. New York: Academic Press.Google Scholar
  5. DiLorenzo, T. J. (2002). Calhoun’s cause: Free trade. The Mises Daily Article, 5 July.Google Scholar
  6. Elliot, J. (Ed.). (1888). The debates in the several state conventions on the adoption of the federal constitution as recommended by the general convention at Philadelphia in 1787 (Vol. 7). New York: Burt Franklin.Google Scholar
  7. Fullerton, D. (1982). On the possibility of an inverse relationship between tax rates and government revenues. Journal of Public Economics, 19, 3–22.CrossRefGoogle Scholar
  8. Gutzman, K. R. (1995). A troublesome legacy: James Madison and the 'Principles of 98.' Journal of the Early Republic, 15(4), 569–589.CrossRefGoogle Scholar
  9. Hamilton, A. (1791). Report on manufactures. In Annals of Congress (Vol. II, Appendix., pp. 971–1034).Google Scholar
  10. Hunt, G. (Ed.). (1900). The writings of James Madison (Vol. 9). New York: G.P. Putnam’s Sons.Google Scholar
  11. Irwin, D. A. (1998). Higher tariffs, lower revenues? Analyzing the fiscal aspects of ‘the great tariff debate of 1888’. Journal of Economic History, 58(1), 59–72.CrossRefGoogle Scholar
  12. Laffer, A. B. (2004). The Laffer Curve: past, present, and future. The Heritage Foundation Backgrounder No. 1765, June 1.Google Scholar
  13. Lence, R. (Ed.). (1992). Union and liberty: The political philosophy of John C. Calhoun. Indianapolis: Liberty Fund.Google Scholar
  14. Madison, J. (1987). Notes of debates in the federal convention of 1787. New York: W.W. Norton.Google Scholar
  15. McGuire, R. A., & Van Cott, T. N. (2002). The confederate constitution, tariffs, and the Laffer relationship. Economic Inquiry, 40(3), 428–438.CrossRefGoogle Scholar
  16. McGuire, R. A., & Van Cott, T. N. (2003). A supply and demand exposition of a constitutional tax loophole: The case of tariff symmetry. Constitutional Political Economy, 14(1), 39–45.CrossRefGoogle Scholar
  17. Saxton, J. (2003). Deficits, taxation, and spending. Statement to the Joint Economic Committee, United States Congress, April.Google Scholar
  18. Showalter, M. (1999) The Hamiltonian Curve. Journal of Political Economy, 107(2), back cover.Google Scholar
  19. Stanwood, E. (1903). American tariff controversies in the nineteenth century. Boston: Houghton Mifflin & Co.Google Scholar
  20. Storing, H. J. (1981). The complete anti-federalist (Vol. 7). Chicago: University of Chicago Press.Google Scholar
  21. Story, J. L. (1833). Commentaries on the constitution of the United States. Cambridge, MA: Brown, Shattuck & Co.Google Scholar
  22. Stuart, C. E. (1981). Swedish tax rates, labor supply, and tax revenues. Journal of Political Economy, 89, 1020–1038.CrossRefGoogle Scholar
  23. Sutter, M., & Weck-Hannemann, H. (2003). Taxation and the veil of ignorance—A real effort experiment on the Laffer curve. Public Choice, 115, 217–240.CrossRefGoogle Scholar
  24. Swenson, C. W. (1988). Taxpayer behavior in response to taxation. An experimental analysis. Journal of Accounting and Public Policy, 7(1), 1–28.CrossRefGoogle Scholar
  25. Taussig, F. W. (1931). The tariff history of the United States. New York: G.G. Putnam & Sons.Google Scholar
  26. Taylor, J. of Caroline ([1821] 1999) . Tyranny Unmasked. Indianapolis: Liberty Fund.Google Scholar
  27. Tullock, G. (1967). The welfare costs of tariffs, Monopolies, and Theft. In C. K. Rowley (Ed.), Virginia political economy (Vol. 1). Indianapolis: Liberty Fund.Google Scholar
  28. Walker, R. J. (1851). Report of the secretary of the treasury for 1845. In Reports of the Secretary of the Treasury of the United States (Vol. 6). Washington, DC: Blair and Rives.Google Scholar
  29. Wilson, C. N. (Ed.). (1992). The essential Calhoun. New Brunswick, NJ: Transaction Publishers.Google Scholar

Copyright information

© Springer Science + Business Media, LLC 2008

Authors and Affiliations

  1. 1.George Mason UniversityViennaUSA

Personalised recommendations