The United States should eliminate most, if not all, of its remaining taxes on imported goods to give low-income consumers extra spending cash, a new report recommended on Tuesday. "The ideal approach would be bold: simply abolish consumer-good tariffs on clothes, shoes, luggage, linens and other home goods," said Ed Gresser, director of the trade policy shop ProgressiveEconomy in the report.
The United States collected about $26 billion in tariffs on about $1.9 trillion of imports in 2010, suggesting an average tariff rate of only 1.3 percent. But in fact, tariffs on individual items vary dramatically, with goods most likely bought by the poor frequently hit with the highest rates, the report said.
Sneakers with a wholesale price of less than $3 have a 48 percent duty, while leather dress shoes only 8.5 percent. The duty on a polyester bra is 16.9 percent but just 2.7 percent on a silk one. A canvas bag faces a 16 percent tariff, but one made from snakeskin 5.3 percent. Gresser, who worked previously for Senator Max Baucus and the US Trade Representative's office, estimated about two-thirds of US import duties are collected on home goods such as clothes, shoes, towels, pillowcases, luggage, handbags, silverware, plates and drinking glasses. Many of those items are no longer made in the United States.
Import taxes are often defended as necessary to protect to American jobs, but falling US employment in high-tariff industries such as clothes, shoes, luggage and linens suggest they have been ineffective at that. Some 1.34 million Americans worked for clothing manufacturers in 1970, but 40 years later only about 160,000 still do. The US shoe industry has shrunk from 230,000 workers to 1,000 over the past four decades.
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