History of tariffs in the United States

The framers of the [[United States Constitution]] gave the federal government authority to tax, stating that Congress has the power to "lay and collect taxes, duties, imposts and excises, pay the debts and provide for the common defense and general welfare of the United States." and also "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Tariffs between states is prohibited by the U.S. Constitution, and all domestically made products can be imported or shipped to another state tax-free.

The framers of the [[United States Constitution]] gave the federal government authority to tax, stating that Congress has the power to "lay and collect taxes, duties, imposts and excises, pay the debts and provide for the common defense and general welfare of the United States." and also "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." Tariffs between states is prohibited by the U.S. Constitution, and all domestically made products can be imported or shipped to another state tax-free.

Responding to an urgent need for federal revenue and in light of concerns over the trade balance, the [[First United States Congress]] passed, and President [[George Washington]] signed, the Hamilton [[Tariff of 1789]], which authorized the collection of duties on imported goods. [[Customs]] duties as set by tariff rates up to 1860 were usually about 80–95% of all federal revenue. Having just fought a war over taxation, among other things, the U.S. Congress wanted a reliable source of income that was relatively unobtrusive and easy to collect. It also sought to protect the infant industries that had developed during the war but which were now threatened by cheaper imports, especially from England.<ref name="auto6">Dewey, ''Financial History of the United States'' (5th ed. 1915) ch. 4–5</ref>

Responding to an urgent need for federal revenue and in light of concerns over the trade balance, the [[First United States Congress]] passed, and President [[George Washington]] signed, the Hamilton [[Tariff of 1789]], which authorized the collection of duties on imported goods. [[Customs]] duties as set by tariff rates up to 1860 were usually about 80–95% of all federal revenue. Having just fought a war over taxation, among other things, the U.S. Congress wanted a reliable source of income that was relatively unobtrusive and easy to collect.<ref name="auto6">Dewey, ''Financial History of the United States'' (5th ed. 1915) ch. 4–5</ref>

There was a consensus among the [[Founding Fathers of the United States|Founding Fathers]] that it was the most efficient way of raising [[public funds]] as well as the most politically acceptable. Early [[sales tax]]es in the post-colonial period were highly controversial, difficult to enforce, and costly to administer. This was evident during events like the [[Whiskey Rebellion]], where the enforcement of sales taxes led to significant resistance. Similarly, an [[income tax]] did not make sense for numerous reasons, particularly due to the complexities of tracking and collecting it. In contrast, [[tariff]]s were a simpler solution. [[Imports]] entered the United States primarily through a limited number of [[ports]], such as [[Boston]], [[New York City]], [[Philadelphia]], [[Baltimore]], and [[Charleston, South Carolina]]. This concentration of imports made it easier to impose taxes directly at these points, streamlining the process of collection. Furthermore, tariffs were less visible to the general public because they were built into the price of goods, reducing political resistance. The system allowed for efficient revenue generation without the immediate visibility or perceived burden of other tax forms, contributing to its political acceptability among the Founders.<ref>{{cite web

| url = https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2017/q3/interview.pdf

| title = Interview: Douglas Irwin

| author = Aaron Steelman

| publisher = Federal Reserve Bank of Richmond

| date = 2017-08

| accessdate = 2025-07-04

}}</ref>

Tariffs and excise taxes were authorized by the United States Constitution and recommended by the first [[United States Secretary of the Treasury]], [[Alexander Hamilton]] in 1789 to tax foreign imports and set up low excise taxes on whiskey and a few other products to provide the Federal Government with enough money to pay its operating expenses and to redeem at full value U.S. Federal debts and the debts the states had accumulated during the Revolutionary War. The Congress set low excise taxes on only a few goods, such as, [[whiskey]], [[rum]], [[tobacco]], [[Snuff (tobacco)|snuff]] and refined [[sugar]]. The tax on whiskey was highly controversial and set off massive protests by Western Farmers in the [[Whiskey Rebellion]] of 1794, which was suppressed by General Washington at the head of an army. The whiskey excise tax collected so little and was so despised it was abolished by President [[Thomas Jefferson]] in 1802.<ref name="auto6"/>

Tariffs and excise taxes were authorized by the United States Constitution and recommended by the first [[United States Secretary of the Treasury]], [[Alexander Hamilton]] in 1789 to tax foreign imports and set up low excise taxes on whiskey and a few other products to provide the Federal Government with enough money to pay its operating expenses and to redeem at full value U.S. Federal debts and the debts the states had accumulated during the Revolutionary War. The Congress set low excise taxes on only a few goods, such as, [[whiskey]], [[rum]], [[tobacco]], [[Snuff (tobacco)|snuff]] and refined [[sugar]]. The tax on whiskey was highly controversial and set off massive protests by Western Farmers in the [[Whiskey Rebellion]] of 1794, which was suppressed by General Washington at the head of an army. The whiskey excise tax collected so little and was so despised it was abolished by President [[Thomas Jefferson]] in 1802.<ref name="auto6"/>