Tariffs Used as a Money Maker for Government?
By Noreen Alladina • Friday, January 8, 2010 11:57 am
We are bombarded with news about the Obama administration’s recent addition of tariffs on Chinese tires or on steel and the possibility of a trade war looming ahead. However, the public is utterly unaware of the taxes imposed on the insignificant items more commonly known in Congress as the “miscellaneous tariff bills.
These bills include a laundry list of a narrow and seemingly arbitrary set of goods ranging from the duty on bells designed for use on bicycles to the duty on ice shavers and even as specific as the duty on combination single slot toaster and toaster ovens. Every so often, a compilation of the suspension of many of these tariffs is passed through Congress on a temporary basis. To apply for a temporary suspension on these tariffs, three conditions must be met:
- There is no domestic production of the good or no objections from current domestic producers
- U.S. Customs and Border Patrol must be able to administer the duty suspension
- The CBO gives it a score of under $500,000 per year
The temporary suspension of the import taxes is one step in the right direction, but I must ask why we need to have these tariffs in the first place. If the reasoning behind the placement of a tariff on a good is that it deters competition from international producers, then why do we have tariffs on goods that don’t even have any domestic producers? This seems to me to be a money-making scheme for the government that only gets noticed when producers who use these goods in their final product point out the fruitlessness of these taxes. And even so, they only receive temporary suspension. I propose we eradicate these tariffs on a permanent basis. This will provide domestic producers with lower costs, providing a boost to their industry and the economy as a whole. Wasn’t that the original intention of tariffs anyway?
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