Wilson-Gorman Tariff Act

The Revenue Act or Wilson-Gorman Tariff of 1894 (ch. 349, §73, USStat|28|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 the Democrats, this attempt at tariff reform was important because it imposed the first peacetime income tax (2% on income over $4000, 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.

The bill introduced by Wilson and passed by the House significant lowered tariff rates, in accord 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.

Income Tax Amendment

The "New York Times" reported that many Democrats in the East, "prefer to take the income tax, odious as it is, and unpopular as it is bound to be with their constituents," than to defeat the Wilson tariff bill. [cite news |first= |last= |authorlink= |coauthors= |title=Democrats More Hopeful |url=http://query.nytimes.com/mem/archive-free/pdf?res=9B00E0D91638E233A25753C3A9679C94659ED7CF |work=New York Times |publisher= |date=1894-01-30 |accessdate= ] Democratic Representative Johnson of Ohio supported the income tax as the lesser of two evils:"he was for an income tax as against a tariff tax; but he believed, that it was un-Democratic, inquisitorial, and wrong in principle." [cite news |first= |last= |authorlink= |coauthors= |title=Mr. Cockran's Final Effort |url=http://query.nytimes.com/mem/archive-free/pdf?res=9907E7D81638E233A25752C3A9679C94659ED7CF |work=New York Times |publisher= |date=1894-01-31 |accessdate= ]

Legacy

The income tax provision was struck down in 1895 by the U.S. Supreme Court case "Pollock v. Farmers' Loan & Trust Co.", ussc|157|428|1895. In 1913, the 16th Amendment permitted a federal income tax.

The tariff provisions of Wilson-Gorman were superseded by the Dingley Tariff of 1897.

References

Further reading

*cite journal |last= |first= |authorlink= |coauthors= |year=1895 |month= |title=The Income Tax of 1894 |journal=Quarterly Journal of Economics |volume=9 |issue=2 |pages=223–234 |doi=10.2307/1885603 |url= |accessdate= |quote=
*cite journal |last=Dunbar |first=Charles F. |authorlink= |coauthors= |year=1894 |month= |title=The New Income Tax |journal=Quarterly Journal of Economics |volume=9 |issue=1 |pages=26–46 |doi=10.2307/1883633 |url= |accessdate= |quote=
*cite book |title=Arthur Pue Gorman |last=Lambert |first=John R. |authorlink= |coauthors= |year=1953 |publisher=Louisiana State University Press |location=Baton Rouge |isbn= |pages= |url=
*cite book |title=History of the United States from the Compromise of 1850 to the McKinley-Bryan Campaign of 1896 |last=Rhodes |first=James Ford |authorlink= |coauthors= |year=1967 |publisher=Kennikat Press |location=Port Washington, NY |isbn= |pages=418–424 |url=
*cite book |title=William L. Wilson and Tariff Reform: A Biography |last=Summers |first=Festus P. |authorlink= |coauthors= |year=1953 |publisher=Rutgers University Press |location=New Brunswick |isbn= |pages= |url=
*cite journal |last=Taussig |first=F. W. |authorlink= |coauthors= |year=1894 |month= |title=The Tariff Act of 1894 |journal=Political Science Quarterly |volume=9 |issue=4 |pages=585–609 |doi=10.2307/2139850 |url= |accessdate= |quote=
*cite journal |last=Williams |first=John Alexander |authorlink= |coauthors= |year=1973 |month= |title=The Bituminous Coal Lobby and the Wilson-Gorman Tariff of 1894 |journal=Maryland Historical Magazine |volume=68 |issue=3 |pages=273–287 |issn=00254258 |url= |accessdate= |quote=

External links

* [http://www.harpweek.com/09Cartoon/BrowseByDateCartoon.asp?Month=September&Date=8 "Harper's Weekly"]