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Higher Tariffs, Lower Revenues? Analyzing the Fiscal Aspects of “The Great Tariff Debate of 1888”

Published online by Cambridge University Press:  03 March 2009

Douglas A. Irwin
Douglas A. Irwin
Affiliation:
Professor of Economics at Dartmouth College, Hanover, NH 03755 and Research Associate, National Bureau of Economic Research.
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Abstract

After the Civil War, Congress maintained high import tariffs to pay off the public debt. By the early 1880s the federal government was running large fiscal surpluses –revenues exceeded expenditures by over 40 percent. The Democrats proposed lower tariffs to reduce customs revenue. The Republicans proposed higher tariffs to reduce imports and customs revenues. This article attempts to determine the revenue effects of the proposed changes. Given the height of the tariff and the price elasticity of U.S. import demand, the actual tariff was below the maximum revenue rate, and therefore a tariff reduction would have reduced customs revenue.

Type
Articles
Information
The Journal of Economic History , Volume 58 , Issue 1 , March 1998 , pp. 59 - 72
Copyright
Copyright © The Economic History Association 1998

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