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    On Tariffs and Subsidies in Interstate Trade: A Legal and Economic Analysis

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    Full-text available at SSRN. See link in this record. (18.87Kb)
    Issue Date
    1996
    Author
    Drahozal, Christopher R.
    Publisher
    Washington University in St. Louis School of Law
    Type
    Article
    Version
    http://ssrn.com/abstract=1905727
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    Abstract
    The dormant Commerce Clause of the United States Constitution, as currently construed by the Supreme Court, permits states to “promote” instate businesses but not to “protect” those businesses from out-of-state competition. This Article examines the tenuous distinction between promoting and protecting local industry in the context of state tariffs and state subsidies. A state tariff—a tax imposed solely on goods imported from another state—is the “paradigmatic example” of a protectionist state law that violates the dormant Commerce Clause. Meanwhile, a state subsidy to domestic producers of a good, when funded out of general revenues, is treated as virtually per se constitutional because it “merely assists local business.” This Article looks to international economics and constitutional history in an attempt to justify the differing treatment of tariffs and subsidies. The analysis suggests that the differing treatment can be justified, although not because subsidies merely promote local business. The analysis also provides a framework for determining whether a state law is more like a valid subsidy or an invalid tariff, and thus aids in understanding a number of recent Supreme Court cases that address the validity of state taxing schemes that favor local businesses.
    Description
    Full-text available at SSRN. See link in this record.
    URI
    http://hdl.handle.net/1808/11310
    Collections
    • Distinguished Professors Scholarly Works [918]
    • Law School Scholarly Works [621]
    Citation
    Christopher R. Drahozal, On Tariffs and Subsidies in Interstate Trade: A Legal and Economic Analysis, 74 WASH. U. L. REV. (1996).

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    Contact KU ScholarWorks
    785-864-8983
    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    785-864-8983

    KU Libraries
    1425 Jayhawk Blvd
    Lawrence, KS 66045
    Image Credits
     

     

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