President Donald Trump's inaugural address at the U.S. Capitol on Monday included an explanation of his trade policy.
“I will immediately begin overhauling our trading system to protect American workers and their families.” he said.
How would he do this? By imposing duties on imported goods. (Related: David Blackmon: President Trump moves to reverse Biden's Green New Deal — with particular focus on wind)
“Rather than taxing the people of other countries in order to make them rich, we impose tariffs and taxes on foreign countries in order to make their people rich.” he said. “To this end, we are establishing a Department of External Revenue to collect all customs duties, duties and revenues. Huge amounts of money will flow into the Treasury from foreign sources. ”
Such proposals would have been familiar to Americans who drafted and ratified the Constitution and served in the first Congress or in the administration of President George Washington.
As originally written and ratified, the Constitution did not envision a federal government funded by income taxes. Article 1, Paragraph 2, Paragraph 3 said “Direct taxes” were to be distributed among the states according to population, similar to Congressional representation. “Representative and direct taxes shall be distributed among the several countries that may be included in this Union, according to their respective numbers.”
In contrast, Article 1, Paragraph 8, Paragraph 1: gave The federal government has the power to raise revenue by imposing tariffs on imported goods. “Congress shall have power to levy and levy taxes, duties, imposts, and excises, to pay the debts, and to provide for the common defense and general welfare of the United States; The tax shall be uniform throughout the United States.”
Supreme Court Justice Joseph Story explained in him According to the Commentary on the United States Constitution published in 1833, these constitutional provisions make tariffs the primary source of revenue for the federal government.
“The principle of expression is constant and uniform. The collection of direct taxes occurs from time to time, but it is a rare occurrence.” I wrote a story. “In 40 years, direct taxes have only been levied three times, and they only occur under extremely unusual and pressing circumstances. The imposition on foreign imports supplies all general wants. And if these do not provide sufficient revenue, then excise taxes are the most reliable and convenient method of taxation. (It may have been expected) that it would never be laid down until other resources failed.
When the first Congress convened in 1789, James Madison of Virginia proposed a bill to impose a tariff to fund the government. “Soon after Congress met in April 1789, Madison recognized the pressing need for revenue and introduced a resolution calling for the adoption of an impost; to the states, but in vain,” wrote William Hill. Essay published in 1893 Published in the University of Chicago Journal of Political Economy. “He made it clear that the purpose of this measure was to increase revenue, and that it was a temporary expedient, valid only until a comprehensive system was in place.”
Pennsylvania Congressman Thomas Fitzsimmons opposed Madison's measure. He believed Congress needed to enact tariff legislation that would protect American industry.
“He therefore moved to replace the plan proposed by Madison with the Pennsylvania system of protection,” Hill writes.
“After much discussion and careful deliberation, the protective tariff proposed by Fitzsimmons was preferred over the revenue tariff advocated by Madison,” Hill wrote in 1893. It has remained largely uninterrupted to this day. ”
“Both Madison and other members questioned the authority of the government they created to impose taxes high enough to provide the protections they desired, or to prohibit imports for the same purposes. There was no,” Hill wrote.
Washington signed the tariff bill on July 4, 1789.
Its first section clearly states that “the imposition of tariffs on imported goods, products, and merchandise is necessary for government assistance, debt relief for the United States, and the encouragement and protection of manufacturers.” Masu.
In addition to protecting American manufacturers, the practice of funding the federal government through tariffs also protected American taxpayers. People who decided not to buy products imported from other countries did not pay customs duties on those products.
Things changed with the ratification of the 16th Amendment in 1913. This provision gave Congress “the power to levy and collect taxes on income from whatever source it may come from, without apportionment among the states, and without regard to census or enumeration.”
In 1910, according to one, Reported by Taxation Foundation, federal revenue was 2.0% of gross national product. In 2010, it accounted for 16.1% of gross domestic product.
President Trump should use every penny raised from tariffs on foreign imports to cut income taxes for American workers.
Terence P. Jeffrey is editor of the Daily Caller News Foundation. To learn more about Terrence P. Jeffrey and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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