Wednesday, September 12, 2018

Douglas Battista: A Brief History of Tariffs in America

Douglas Battista
A tariff is essentially a tax on imported goods that serves to generate revenue for the government and encourage domestic production, says Douglas Battista. The idea of taxing imported goods is not a new one. Battista shares a brief history of tariffs below.

According to Douglas Battista, tariffs have been present in the United States since colonial times. The U.S. Congress passed the Tariff of 1789 as a way to help stabilize the economy after the American Revolution. The act states that the monies collected were for the encouragement and protection of local manufacturers and to help discharge US debt.

Douglas Battista explains that tariffs have historically played a major role in foreign trade policies. From between 1789 in 1914, the year after the federal income tax was initiated, tariffs were the major source of finance for the government. During this time, the two major political parties, the Republican/Whigs and Democrats feverishly debated what, exactly, tariffs should be used to fund. The Republican party favored imposing higher tariffs in an effort to encourage American industry while the Democrats simply wanted to cover the operational costs associated with government.

Tariffs were largely present throughout the Civil War. At its conclusion, in 1865, federal revenue was still largely reliant on tariffs and excise taxes. Douglas Battista explains that reliance on this type of income has waned steadily since 1935.

Douglas Battista notes that there have been many hotly debated tariff policies throughout the practice’s long history. Pres. Grover Cleveland lost the 1888 election over his opposition of tariffs and his beliefs that tariffs were, “indefensible extortion.”

One of the lesser anticipated side effects of high tariffs is smuggling. Douglas Battista reports that the Department of Homeland Security and US customs and border protection agencies are tasked with patrolling waters and enforcing maritime law.