The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1889-11-13
WHO PAYS THE TARIFF TAXI
A silly Protection.st Soph:sm Dem oIished b
Practical Illustration.


On the editorial page OF the Indianap-
oils Journal of Oct. %, one reads the fol-
lowing:
The Louisville Commercial makes neat point
on the free-trade organs in this:
Last year. during the debates on the Mills bill, and
the subsequent campaign they continually assever-
ated that all tariff duties taxes paid by the peO
pie OF this country; that OF the tariff duty fell
upon the foreigner who brought bis goods to sell in
our market but that all OF 1t was paid by our people
who bought the goods. Now they assert, with tire
some iteration, that the South Americans will
trade with us because we levy duti on the goods
which they would sell us and that they will not pay
that tax. What difference does it make 10 the Span
isb-Amercans how much duty levy their
goods if our people pay it, and they do not?
If free-traders were honest or accessible 10
argument, such things as this would hurt, but
they will 90 right on grinding out the same old
lies and platitudes.
The above is sufficiently emphatic, and
it is not at all ambiguous. But is it good
reason or is it mere fiippancy and sound
signifying nothing?" Would it not be
worth the while TO call little halt and
and take good square look into the real
facts as to who pays the tariff taxes? Let
us not handy epithets, as the able writerin
the Journal has done, but let us try to clear
the mists away.
In order To make a general principle
luminous, let us follow a simple
illustration. Suppose hats can be
made and sold in Europe at 81. Suppose,
further, that in order to protect
the American maker of hats, tax of 80
cents is laid by congress ON every hat i'm
ported. As soon as this is done no Euro
pean hat can be brought to the United
States unless it can be sold here for $l.50.
If the price here be above that figure, the
tariff Is no obstacle TO importation, since
the higher the price the greater is the
profit realized bv the European manufac-
turer The floods" pour in with increas-
ing volume in spite of all that advanced
craftsmanship" can do to keep them out.
A positive premium is put upon importa-
ton. Protection signally fails to protect.
In this case it is evident the foreigner
pays none of the tax, since he becomes
rich by importation, and finds here the
highest market in the world. The man
who wears the imported hat bears every
ounce of the tax burden.
But suppose, again, that the price of
hats here should fall below S1.50-say
to s$l.40. Now all importation of hats
Is cut off, since to send them
here would involve the importer
in loss of 10 cents on every hat In this
case the home buyer OF hats bears tax
burden OF 40 cents. since without tariff he
could buy hats at the free trade price, 81.
The foreigner, being driven from our
market, will find one without loss at 81
in his own country. Hence in this case
also the American buyer bears all the
burden. But the European manufacturer
sees hats sell in America at 81 40, while, if
he attempts to enter our market he can
realize 90 cents less than that, or only
90 cents, which is below the cost of pro-
duction and his own market. This is tan
talizing and irritating to him. He does
not send us his hats, but finds better
market elsewhere, and hence pays no part
OF our tariff tax.
What is further result? When the
price of hats is at full tide-Sl. 80 or above
the national treasury gets an abundance
of revenue from the large importa-
ton, but the home manufacturer gets
absolutely no protection. He is even
more exposed to foreign competition than
he would be under absolutely free trade,
since the higher the price of hats the
stronger is the motive for sending foreign
goods here. Why, then, does he favor a
protective tariff? Because he is made
willing to divide his market with foreign
ers since he now sells his goods at an ex-
travagant profit. 1t will thus appear plain
that so long as the importation of foreign
hats continues, the American consumers
are paying the full amount of the tariff
tax, not only upon all those imported, but
upon the entire volume of our own pro-
auctions also. But if importation stops,
as 1t must when the domestic price has
touched a figure even a shade less than
that dictated by the tariff 81 SOY, then all
hn IS
home manufacturer is complete, since he
has an absolute monopoly OF the market.
But the tax burden of the hat-wearer
is almost as great as before, and the whole
OF it goes as a bonus to the domestic manu-
facturer and not a cent of it into the till of
the government.
Thus it is with all kinds Of fairfield goods.
The real fact is foreigners object to our
tariff, not because We tax them thereby.
since they are free to sell elsewhere, but
because we forbid their participation in
our markets where, under the shelter OF
our tariff barriers, high price prevails in
the very things which they wish to sell
We rudely warn them away from a good
thing which they wish to partake of. The
very fact that the foreigner sends his
goods across the wide Atlantic shows that
he finds here the highest market on the
planet. The very fact that he does not
send them here shows that he can sell
more profitably elsewhere. In neither
case does he bear any of our burdens.
II there were any way by which one
nation could compel another to pay even
a small part of its taxes, it would have
been found out and universally applied
centuries ago. 1t is fact in the very A.
B. c. OF taxation that the person who con-
sumes goods pays all the taxes that have
ever been placed upon them, be they of
foreign or domestic manufacture. The
importer, the jobber, the wholesaler, the
retailer, are all reimbursed by the final
sale. No axiom of geometry is more GER
tain than that we carry our own tariff bur-
dens. ana that foreigners do not lift them
by the weight of a feather.
If our friends, the protectionists, dispute
the tenets of tariff reformers. let them
point out an error by course of reason
ing, and by way OF variety give us, now
and then, something more convincing
than bald, black assertion. Let them stun
us by hard hits in argument, not by hurl-
ing abusive epithets, the 'last ditch" of a
failing cause. EDWARD TAYLOR.
Niprornae II