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pampango

(24,692 posts)
26. Republicans did not raise tariffs to starve government. Industry lobbyists wanted profit protection
Thu Feb 21, 2013, 03:14 PM
Feb 2013

for their corporations from foreign competition. You are right, though, that lowering tariffs has led to increase tariff revenues. Tariff revenues were at an all time high in 2010 at $25 billion. Of course that is only about 1% of total government revenue, thanks largely to the 16th Amendment and the income tax.

The Hidden Progressive History of Income Tax

The income tax was the most popular economic justice movement of the late 19th and early 20th century. This truly grassroots movement forced politicians to act in order to stay in office, leading to the 16th Amendment to the Constitution in 1913. That’s right, the income tax was so popular that the nation passed a constitutional amendment so that the right-wing Supreme Court couldn’t overturn it.

Income and Tax Inequality in the Late 19th Century

Everyday Americans hated the tax system of the Gilded Age. The federal government gathered taxes in two ways. First, it placed high tariff rates on imports. These import taxes protected American industries from competition. This allowed companies to charge high prices on products that the working class needed to survive while also protecting the monopolies that controlled their everyday lives. Second, the government had high excise taxes on tobacco and alcohol, two products used heavily by the American working class.

These forms of indirect taxes meant that almost the entirety of federal tax revenue came from the poor while the rich paid virtually nothing. This spawned enormous outrage. The poor had a model in creating an income tax—President Abraham Lincoln, who instituted the nation’s first income tax to pay for the Civil War. Lincoln’s Revenue Act of 1861 created a graduated tax on everyone who made at least $800 a year, allowing him to pay for the war. Although a grand success, Republicans pulled away from it as they backed off of racial equality in the late 1860s and it was overturned in 1872.

...grassroots organizations across the country began organizing around replacing the tariff with the income tax. He tells the story of Merlinda Sisins of Pickleville, Michigan, a mother of 16 who, despite a lack of education and poor spelling, began writing letters to the Journal of United Labor, where she demanded that working people nominate their own to Congress in order to pass legislation that would destroy the tariff and the monopolies.

The income tax became such an overwhelming political movement during the 1890s that Congress, despite so many members' close relationship with the plutocracy, passed an income tax law that would have forced the rich to begin paying income taxes for the first time since 1870. The Wilson-Gorman Tariff of 1894 placed a 2% tax on incomes over $4000 a year (approximately $88,000 today).

Corporations immediately organized against this. In a strategy we can recognize today, the Chamber of Commerce distorted the bill’s purpose, telling the public that the income tax would drive them into poverty, even though the bill did not affect working-class people. Yet the Chamber made little headway in the face of this overwhelmingly popular movement.

http://www.alternet.org/labor/hidden-progressive-history-income-tax?akid=9361.277129.2KDGDd&rd=1&src=newsletter706781&t=14

The opposition to high tariffs was much, much more widespread than simply from those who wanted an increase in government revenue. After the passage of the 16th Amendment in 1913 tariffs were a smaller and smaller part of government revenues (from 44% in 1913 to 1% today). The high tariffs that republicans enacted in the 1920's were protection for their corporate backers, rather than attempt to starve government since tariffs as a source of revenue were increasing irrelevant by then. And this was less than 10 years after the progressive victory over high tariffs represented by the 16th Amendment.

These days high tariffs seem like a progressive idea to some, but a hundred years ago - when we actually had high tariffs - liberals did not view them that way. Perhaps, as with love, absence makes the heart grow fonder with respect to tariffs.


"People tend to forget the 1920s was a "Boom" time for the US..." They were a boom time but not for everyone. It is true that the GDP increased and Wall Street rose swiftly - at least until 1929, of course - but it is also true that income inequality reached record levels during the 1920's (since surpassed during the Bush years) and unions suffered such that percentage of the work force in unions reached historic lows (since surpassed as well). (Apparently the GOP could kill unions with high tariffs or with low tariffs.) So the 1920's were a 'Boom' time for some but not for many.

These Pacific and Atlantic trade negotiations are a good thing. There are major international trade problems and, as with global problems in general, it is a good idea to negotiate a global solution to them. We are right to be skeptical about the outcome, but liberals should not be afraid to negotiate on this issue or any other.

The reason for some optimism about them is that one of their main goals is to eliminate much of China's trading advantage by crafting standards on labor, the environment, etc. that China will not be able to comply with unless it transforms it society completely. If these standards could be included in WTO rules that would be great, but those negotiations have gone nowhere.

If our goal is not to put labor and environmental regulations into trade agreements, the Pacific negotiations make little sense. We already have 'free trade' agreements with most of the countries involved. Why would we include Canada, Mexico, Australia, Singapore, Chile and others in a trade negotiation, when we already have an agreement with them, unless we were including standards that will make it more difficult for China to compete with countries that have better labor and environmental laws?

And of course our Atlantic trade negotiation is with countries that already have better labor and environmental laws than the US has, so you probably would not apply tariffs on their products anyway ("...impose tariffs to reflect the lack of environmental and labor laws with other nations.&quot

Indeed, we could 'walk away and take our ball with us'. That is precisely what the republican base here (and far-right parties in Europe like the National Front in France) want to do. They favor the US withdrawing from the UN, the WTO, the IMF, World Bank, Law of the Sea Treaty and about any other international agreement or organization that keeps the US from doing whatever it wants to do whenever it wants to do it. In that way republicans have not changed much over the decades. They kept the US out of the League of Nations after WWI, the International Trade Organization after WWII and the Kyoto Protocol within the last 15 years.

At least since Woodrow Wilson the Democrats have been the party that engages with the world; negotiates disagreements with other countries; and tries to solve global problems by involving as many countries as possible. Republicans have more often been the party of 'cowboy diplomacy' whereby the US can do whatever it wants to do and to hell with the rest of the world. Other countries had better join us or get out of the way.

I do not want the US to "take its ball and go home" on any global issue. I believe in multilateral negotiations on global problems, which lead to international agreements that are effective and enforceable so that countries cannot, after a treaty is agreed to, say "Never mind. We have the 'sovereign right' to pollute, invade, torture or do anything else we want to do. We are a sovereign nation and hereby walk away from any treaty that we previously agreed to."
We burst our pimples at you! riqster Feb 2013 #1
Titan Tires dlwickham Feb 2013 #2
I just hate it that we've deteriorited to the point where this kind of rudeness Flaxbee Feb 2013 #3
"Well then you can just keep your stupid freaking Freedom Fries." - Minister Montebourg Berlum Feb 2013 #4
"How stupid do you think we are?" Iggo Feb 2013 #5
Yea..those Michelin tires suck.. Sancho Feb 2013 #6
Michelin and those French unions built the first radial tire aint_no_life_nowhere Feb 2013 #25
how stupid? teabagger stupid Skittles Feb 2013 #7
Ugh davidthegnome Feb 2013 #8
Same story - UK Guardian: US v France: where is it best to be an employee - or an employer? pampango Feb 2013 #9
This asshole made $2,849,829 last year Teamster Jeff Feb 2013 #10
"pay less than one Euro per hour wage" -- And he's proud of this? AnotherMcIntosh Feb 2013 #11
You have defined the American version of freedom and democracy. Mika Feb 2013 #13
So how many cheap slave made tires does Titan import into the USA and claim as American made? Sunlei Feb 2013 #12
The idea an American business leader is going to lecture the French... Sen. Walter Sobchak Feb 2013 #14
France Isn't the Titan CEO's Biggest Problem DisgustipatedinCA Feb 2013 #15
Very interesting. Thanks for posting this, DisgustipatedinCA. n/t pampango Feb 2013 #17
So, the point here is - correct me if I'm wrong - that workers shouldn't be treated well. harmonicon Feb 2013 #16
Is Titian actually Anti-union or is Titian demanding that the French Government do something happyslug Feb 2013 #18
Or an industrialist wants tariffs to protect his profits from competition. pampango Feb 2013 #19
GATT is a serious of post WWII agreements, FDR had little to do with them happyslug Feb 2013 #20
GATT was "was built on the Reciprocal Trade Agreements Act of 1934" which FDR pushed through pampango Feb 2013 #21
The Democratic "opposition" to Tariffs had little to do with Democrats embracing "Free Trade". happyslug Feb 2013 #22
Republicans did not raise tariffs to starve government. Industry lobbyists wanted profit protection pampango Feb 2013 #26
IMHO he's tell the French there's no point in trying. Gormy Cuss Feb 2013 #24
I like how proud he is of paying Chinese workers 1 Euro per hour. Ash_F Feb 2013 #23
He loves making those Asian workers eat shit! What a hero! dmosh42 Feb 2013 #27
We fart in your general direction! nt Nay Feb 2013 #28
Guess what else is "The French Way" PD Turk Feb 2013 #29
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