Page 108 - BWM March 2013

108 | Business World Magazine | March 2013
footwear is taxed at 48 percent, others can be
taxed as high as 68 percent.
Policies are a byproduct of The Tariff Act
of 1930, also known as the Smoot-Hawley
Tariff, which was signed into law June 17,
1930, with sponsorship by Senator Reed
Smoot and Representative Willis Hawley.
This legislation raised U.S. tariffs on more
than 20,000 goods imported to America. At
the time, the intent was to provide greater se-
curity toAmericanmanufacturers, but again,
since shoe manufacturing has by and large
moved overseas in deference to that measure,
Priest says adherence to the policy not only
defies logic, but also unfairly leaves “Ameri-
can consumers left holding the bill for an ini-
tiative that has long outlived its purpose.”
To further demonstrate the illogical ineq-
uity in the way tariffs are applied, Priest offers
an example that involves variable rates. For
instance, consider the basic canvas-clothed
shoe with a rubber sole (a line that would
otherwise be seen at the lower end of costs
such as might be purchased atWalmart).The
duty rate applied to these very inexpensive
shoes can be as much as 48 percent, while
that of a higher quality, leather loafer, would
have rates less than 10 percent. Thus, lower
income consumers are hit with the brunt of
higher costs when purchasing lower valued