Democratic Northwest. [volume] (Napoleon, Ohio) 1869-1894, 1888-08-02
Simply a Tax on the Many for the
Benefit ofthe Few.
How and Why the Consumer Must
Pay the Tax in the End.
The Sham Protection Afforded Agri-
culture by the Much-Vaunted
Wool Tariff of 1867,
[From the EnQuiIer.1

|
How by an indirect method?
Because the tax being added to the
actual original cost of the article en-.
hances its cost to the consumer by the
amount of the tariff tax or duty, plus
the percentage for profit charged bv
the importer, the wholesaler and re-
taller, who finally sells it to the con-
sumner. For the sake of convenience
let US cosider the importer and whole
saler one person.
Does the consumer pay this tariff
tax?
Necessarily; he cannot avoid 1t.
Will you give me an illustration
showing this to be the case-that the
consumer and not the importer pays
the tariff tax?
Let us take, by way of illustration, a
yard of woolen cloth manufactured
abroad and imported into the United
States. The cost to the importer at the
place manufacture is fifty cents for
the yard of cloth. We will assume that
when 1t reaches the port of entry in
the United States it must pay an ad-
vOlorem duty or tax of 6S per cent. The
duty on the yard of cloth is "a cents
When the importer pays this, and not
before, he may sell it to the retail deal
er. What does he charge the retailer?
10 the fifty cents, first cost, he adds "a
cents tariff tax, making the prime cost
of the yard of cloth "a cents. He then
adds, say per cent. of this sum invest
ed for freight and insurance-42 cents
and 10 per cent. for his profits-8.4
cents-or "a plus 40 plus S.4 equal 96.6
cents for the cloth. The retail dealer is
also entitled to his profits, and this he
adds to the 96.6 investment which he
paid to the importer. We put the re-
tailer's profit at 25 per cent.-24.1 cents
which, added to the 96.6 makes
$1.2O.7 the cost to the consumer. The
importer first pays the tariff tax of "a
cents, but he gets it back from the re-
tail dealer. The retail dealer, in his
turn adds it to the cost of the article,
along with the Is per cent. freight, in
surance and profit of the importer, and
gets the whole of it back from the con-
sumner, who, being the consumer can
not re-collect it from some one else,-
Thus it will be readily seen that the
whole of the tariff tax is paid by the
consumer in the end-by the man who
makes the last purchase. 1t matters
not how many dealers hands the cloth
may pass through, the tariff tax figures
all the way through as part of the
cost, and the consumer must pay it
along with all the handlers profits.
Suppose no tariff tax was levied on it,
what would this yard of cloth cost the
consumer, allowing the importer and
retailer the same as before?
The importer would then pay fiftv
cents for the cloth, add per cent,-2.5
cents-for freight and insurance, and 10
per cents cents-for his profit, and it
would cost the retailer SIS cents. Then
the retailer would add 25 per cent.-14.4
cents-for his profit, and the computa-
tlon would stand thus: so plus 2.5 plus
5 equal 57.5 plus 14.4 equal 71.9 cents.
the price the consumer would have to
pay.
Suppose the tariff tax were reduced
from 68 to 40 per cent, and. allowing
the importer and retailer the same as
before, what would be the cost of the
cloth to the consumer?
Take the original so cents and add 5
per cent.-2.5 cents--for freight and in
surance, 20 cents tariff tax 10 per cent.
~ cents for profit. and the cost to
the retailer would be 1917 cents. The
retailer would add Is per cent.-or 20
cents in round numbers-for profit, and
the cost to the consumer may thus be
stated: so plus o.5 plus 20 plus 7.2|
equal 1871, plus 20 equal 99.7 cents. Tn
each OF these transactions the importer
and retailer would make precisely the
same percentage of profit on their in
vestment. In the second transaction
the consumer would save 4S.8 cents, In
the third case 20 cents.
In the first case cited the cost to the
consumer of 80 cents worth of imported
wooden cloth would be $1.2O.7?
Yes.
This is the outcome of the present
tariff tax?
It is.
In the second case the cost of the
same cloth to the same consumer
would be 71.9 cents?
Certainly.
This would be free trade, would it
not?
It would.
In the third case the so cents worth
of cloth would cost the consumer 99.7 |
ceEts, O saving of 20 cents to the con-
while it afforded precisely the
same amount of protection to the
American manufacturer?
That Is the fact.
Is not this the Mills bill?
Undoubtedly it is. ........
Does this illustration hold good as to |
Dill importations on which tariff tax
is levied and collected?
1t does. The amount of tax varies
on different articles and different classi-
fications of the same article, but what
ever 1t Is, great or small, it is added TO |
The cost and must be collected In the |
end from the consumer.
Then the higher the tax the greater
the cost, and the more the consumer
mas to pay?
There is no gainsaying that.
If the rate of the tariff tax Is reduced,
{ reduces proportionately the cost of
he article to the consumer?
OF course.
On what articles Is the tariff tax the
highest? +
On the necessaries Of life, such as the
cheaper and cOarser pYadoa of cIofhinC |