Our Government: Local, State, and National: Idaho Edition

by James Alton James; Albert Hart Sanford

SOME IMPORTANT POWERS OF CONGRESS.

I. NATIONAL FINANCES.

The Power of Taxation.—When we speak of the finances of a country, we mean its revenues and expenditures. Revenues have their origin chiefly[^[20]] in taxation, and the power vested in Congress by virtue of which taxes are imposed and collected is found in the following clause:

Article I, Section 8, Clause 1. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States.

Duties on Imports.—The two forms of taxes relied upon by the United States for its revenues are (1) duties and (2) excises.[^[21]] A duty is a tax levied upon goods that are imported into the United States.[^[22]] The merchant doing business in New York, for example, cannot obtain possession of the goods he has imported until the officers of the custom-house at that port have examined the invoice, or the list of articles in each package, with their prices; and the officers may examine the goods, also, to see if they correspond in amount and quality to the statements of the invoice. The importer then pays to the collector of the port of New York the amount of the duty levied on his importation.

Kinds of Duties.—These are of two kinds. (1) Specific duties are fixed amounts levied on certain units of measurement of commodities, as the pound, yard, or gallon. Under the tariff law of 1909 the duty on tin-plate was one and two-tenths cents for each pound. (2) Ad valorem duties are levied at a certain rate per cent on the value of the articles taxed. The law of 1909 laid a duty of 60 per cent on lace manufactures.

On some articles both kinds of duties are levied. Under the law just mentioned, the duties on carpets and rugs were 10 cents per square foot and 40 per cent ad valorem in addition.

Passengers on steamships coming from foreign countries are required to declare what dutiable goods they have among their baggage, each person being allowed to enter $100 worth of goods free of duty. Upon landing, their baggage is examined; trunks and valises are opened, and in suspected cases the persons of travelers are searched for concealed dutiable goods. The temptation to under valuation and to smuggling, in order to escape this form of taxation, is so great that constant vigilance is necessary at custom-houses and along the borders of the United States to prevent these frauds. Special agents and revenue cutters are employed to detect violations of the law.

Tariff Laws.—A tariff is the list of the rates of duties fixed by law. An importer of foreign goods must consider the amount of the duties he has paid as part of the cost of the goods when he sells them. If a higher price is caused in this way, less of such goods will be imported and the production of the goods in this country will be encouraged. Consequently, high rates of duties may have a decided influence upon the industries of a country. When the rates of duties are so fixed as to bring about this result, we have a protective tariff; i.e., one under which persons can produce in this country certain articles which otherwise they could not produce, because of their cheapness when imported from a foreign country. The duties are made so high that it is not profitable to import the articles. When rates of duties are fixed primarily with the object of raising revenue, and without regard to their effect upon the industries of the country, we have a tariff for revenue. This kind of tariff is generally meant when the term free trade is used. Articles on which no duties are imposed are said to be on the free list. There is no country which fails to collect duties on some of its importations.

Reciprocity Agreements.—The United States has entered into reciprocity treaties with various countries for securing the reduction of tariff rates. Each country agrees to admit certain products of the other country at reduced rates, or free of duty. These are generally commodities in the production of which there is little or no competition between the parties to the treaty.