Saturday, December 12, 2015

Wilson-Gorman Tariff

The Revenue Act or Wilson-Gorman Tariff of 1894 (ch. 349, §73, 28 Stat. 570, August 27, 1894) slightly reduced the United States tariff rates from the numbers set in the 1890 McKinley tariff and imposed a 2% income tax. It is named for William L. Wilson, Representative from West Virginia, chair of the U.S. House Ways and Means Committee, and Senator Arthur P. Gorman of Maryland, both Democrats.

Supported by pro-free trade members of the Democratic Party, this attempt at tariff reform was important because it imposed the first peacetime income tax (2% on income over $4,000, or $88,100 in 2010 dollars, which meant fewer than 10% of households would pay any). The purpose of the income tax was to make up for revenue that would be lost by tariff reductions. By coincidence, $4,000 ($88,100 in 2010 dollars) would be the exemption for married couples when the Revenue Act of (October) 1913 was signed into law by President Woodrow Wilson, as a result of the ratification of the 16th Amendment to the U.S. Constitution in February 1913.

The bill introduced by Wilson and passed by the House significantly lowered tariff rates, in accordance with Democratic platform promises, and dropped the tariff to zero on iron ore, coal, lumber and wool, which angered American producers. With Senator Gorman operating behind the scenes, protectionists in the Senate added more than 600 amendments that nullified most of the reforms and raised rates again. The "Sugar Trust" in particular made changes that favored itself at the expense of the consumer.

President Grover Cleveland, who had campaigned on lowering the tariff and supported Wilson's version of the bill, was devastated that his program had been ruined. He denounced the revised measure as a disgraceful product of "party perfidy and party dishonor," but still allowed it to become law without his signature, believing that it was better than nothing and was at the least an improvement over the McKinley tariff.

The Wilson-Gorman Tariff attracted much opposition in West Texas, where sheepraisers opposed the measure. A Republican, George H. Noonan, was elected to Congress from the district stretching from San Angelo to San Antonio but only for a single term. Among Noonan's backers was a former slave, George B. Jackson, a businessman in San Angelo often called "the wealthiest black man in Texas" in the late 19th century.

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