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Taxation and the political economy of the tariff

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  • Hansen, John Mark

Abstract

Traditional accounts of U.S. tariff policy emphasize trade strategies and interest group politics. This article makes a departure. It opens with an observation: up until World War I, the tariff was the largest single source of federal government revenues. It then explores the significance of tariffs as taxes, theoretically and empirically.In its first part, the article develops a theory of taxation politics and applies it to the tariff. In its second part, it submits the theory to an empirical test, modeling changes in U.S. tariff rates from 1829 to 1940. The politics of tariff revision, it argues, followed from two characteristics of the tariff as tax: from the extent of the treasury's dependence upon it and from the distributive pattern of its burdens and benefits. Taken together, the article concludes, revenue dependence and distributive incidence account for several diverse aspects of American tariff policy, including the structure of its coalitions, the shifts in its objectives, and the timing of its innovations.

Suggested Citation

  • Hansen, John Mark, 1990. "Taxation and the political economy of the tariff," International Organization, Cambridge University Press, vol. 44(4), pages 527-551, October.
    • Handle: RePEc:cup:intorg:v:44:y:1990:i:04:p:527-551_03
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    Cited by:

    1. Richard E. Baldwin & Frédéric Robert-Nicoud, 2007. "Entry and Asymmetric Lobbying: Why Governments Pick Losers," Journal of the European Economic Association, MIT Press, vol. 5(5), pages 1064-1093, September.
    2. Thiemo Fetzer & Carlo Schwarz, 2021. "Tariffs and Politics: Evidence from Trump’s Trade Wars," The Economic Journal, Royal Economic Society, vol. 131(636), pages 1717-1741.
    3. Margarita Katsimi & Thomas Moutos, 2005. "Inequality and Relative Reliance on Tariffs: Theory and Evidence," CESifo Working Paper Series 1457, CESifo.
    4. Arnaud Costinot, 2009. "Jobs, Jobs, Jobs: A "New" Perspective on Protectionism," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 1011-1041, September.
    5. Andrew J Clarke & Jeffery A Jenkins & Kenneth S Lowande, 2017. "Tariff politics and congressional elections: exploring the Cannon Thesis," Journal of Theoretical Politics, , vol. 29(3), pages 382-414, July.
    6. Estefania-Flores, Julia & Furceri, Davide & Hannan, Swarnali A. & Ostry, Jonathan D. & Rose, Andrew K., 2023. "Are trade restrictions counter-cyclical? Evidence from a new aggregate measure," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 745-767.
    7. Costenot, Arnaud, 2006. "Jobs, Jobs, Jobs: A New Perspective on Protectionism," University of California at San Diego, Economics Working Paper Series qt1bt8n04n, Department of Economics, UC San Diego.
    8. Bagwell Kyle & Staiger Robert W., 2003. "Protection and the Business Cycle," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(1), pages 1-45, September.
    9. Sahuguet, Nicolas & Conconi, Paola, 2005. "Re-election Incentives and the Sustainability of International Cooperation," CEPR Discussion Papers 5401, C.E.P.R. Discussion Papers.
    10. A. Ju. Tereshenkova, 2022. "Problems of Practice and Prospects for the Customs Tariff Development in the Eurasian Economic Union," Administrative Consulting, Russian Presidential Academy of National Economy and Public Administration. North-West Institute of Management., issue 4.
    11. James Lake & Maia K. Linask, 2015. "Domestic political competition and binding overhang in developing countries," Departmental Working Papers 1503, Southern Methodist University, Department of Economics.
    12. repec:cte:whrepe:dh021002 is not listed on IDEAS
    13. Patrick J. McDonald, 2004. "Peace through Trade or Free Trade?," Journal of Conflict Resolution, Peace Science Society (International), vol. 48(4), pages 547-572, August.
    14. Lake, James & Linask, Maia K., 2016. "Could tariffs be pro-cyclical?," Journal of International Economics, Elsevier, vol. 103(C), pages 124-146.
    15. James Lake & Maia Linask, 2016. "Domestic political competition and pro-cyclical import protection," Review of International Economics, Wiley Blackwell, vol. 24(3), pages 564-591, August.
    16. Antonis Adam, 2009. "Fiscal Reliance on Tariff Revenues: In Search of a Political Economy Explanation?," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 610-625, November.
    17. Rodrik, Dani, 1994. "What does the Political Economy Literature on Trade Policy (Not) Tell Us That We Ought to Know?," CEPR Discussion Papers 1039, C.E.P.R. Discussion Papers.
    18. Carsten Herrmann-Pillath, 2006. "Reciprocity and the hidden constitution of world trade," Constitutional Political Economy, Springer, vol. 17(3), pages 133-163, September.
    19. Margarita Katsimi & Thomas Moutos, 2010. "Inequality and the Relative Reliance on Tariffs," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 121-137, February.

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