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How tariffs punish Americans with lower incomes
Published on Sunday, Jan 06, 2008
A bipartisan coalition of House members introduced the measure in November. They recognize the harm caused by high tariffs applied to footwear imported from other countries. The legislation would repeal the tariffs, making shoes more affordable, especially for those at lower income levels.
These tariffs are relics of another era, the 19th century, to be exact. The past 50 years have seen a steady lowering of tariffs, on such items as furniture, toys and cars. Unfortunately, footwear has escaped attention. The result is, the levies on shoes amount to 10 times the average tariff rate. Worse, the steepest tariff applies to the cheapest footwear, sneakers, making this shoe tax particularly regressive.
The Progressive Policy Institute recently noted that Americans purchased 2.4 billion pairs of shoes in 2006. Their value at the border was $19 billion, the federal government then collected $1.9 billion in duties. The average American tariff rate is 1.6 percent. Yet for dress shoes the rate is 8.5 percent, for running shoes, 20 percent, and a whopping 60 percent for some types of cheap sneakers.
All of this adds up to higher prices. The PPI analysis explained that for sneakers to tariff regimen boosts the price by roughly one-third.
The usual argument for trade protection is the need to preserve American jobs. In this case, there aren't any American manufacturers of such inexpensive shoes. The American jobs involve design, research, marketing and specialty items. Thus, these shoe tariffs serve largely to punish the needy, making shoes more costly, reducing the amount of money families have to spend on other goods and services.
By next holiday season, let's hope Congress has done its generous part and removed these punitive levies on imported shoes.
Get the full article here.
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