Revenue Act of 1913

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The Revenue Act of 1913, also known as the Underwood Act , Underwood Tariff Act, or Underwood-Simmons Act (Chapter 16, 38 Stat. 114, October 3, 1913) was a United States collective bargaining act, within federal income tax , which was ratified of the Sixteenth Supplementary Law lowered the basic tariffs from 40% to 25%. That was well below the Payne – Aldrich Tariff Act (1909). The Revenue Act was enacted by President Woodrow Wilson on October 3, 1913, following a concern from Alabama Congressman Oscar Underwood .

Rates

Wilson convened a special session of Congress in April 1913 . His immediate goal was to face the controversial tariff issue. He has paid special attention to the matter by choosing to appear before Congress in person. The joint session was a spectacular event. A huge crowd gathered and every seat in the chamber of the house was taken. The reporting in the newspapers was intense. Wilson spoke only briefly, but made it clear that tariff reform was necessary. The burden was clearly on the shoulders of the Democrats , who for the first time in 18 years had a majority in both houses of Congress.

The House passed the law on May 8, 1913 by 281 votes to 139. Wilson used his patronage to run it through the Senate , which passed it on September 9, 1913 by 44 votes to 37. Politically, the law was seen as a triumph for the new president. The law set the lowest rates since the Walker tariff of 1857. The duty for woolen fabrics went from 56% to 18.5%. Steel rails, raw wool, iron ore, and farm implements now had zero rates. The reciprocity program desired by the Republicans has been eliminated. The Underwood-Simmons measure increased the free list by including wool , iron , steel , agricultural machinery, and many raw materials and foods . The average rate was about 26%.

Income tax

The law also provided for the reinstatement of a federal income tax to offset the likely loss of revenue from the tariff cut. The most recent effort to tax taxes, the Wilson – Gorman Tariff Act of 1894, had been ruled unconstitutional by the Supreme Court because the tax on dividends , interest and rent had been viewed as a direct tax that was not representatively shared. However, this obstacle was removed by the ratification of the Sixteenth Amendment on February 3, 1913.

Income of married couples in excess of $ 4,000, as well as those of individuals who earned $ 3,000 or more, were now subject to 1% tax.

The measure also provided a progressive tax structure . High income people were taxed at higher rates. In just a few years, income tax became the federal government's main source of income, significantly outperforming customs revenue. Less than 1% of the population still paid federal income tax. The law was applicable to income for 1913, 1914 and 1915.

consequences

It is difficult to make a meaningful judgment on the effects of the law as the entire world economy soon changed with the outbreak of World War I. American products were in high demand all over the world, which challenged protectionism . The next reorganization of national tariff policy would only take place after the end of the war: the Fordney-McCumber tariff of 1922, which increased the rates again.

However, there was an impact on the Cuban tobacco industry in terms of its imports into the states. Theodore Garbade , President of the Cuban Cigar Manufacturers Association, discussed this with the President of Cuba, Mario García Menocal .

literature

Individual evidence

  1. ^ Congressional Research Service, Library of Congress. The President's State of the Union Message: Frequently Asked Questions. [1] (PDF).
  2. ^ Revenue Act of 1913 , Section II, A. subdiv. 1, 38 Stat. 114, 166.
  3. ^ Revenue Act of 1913 , Section II, C., 38 Stat. 114, 168.
  4. ↑ surtax rates under the Revenue Acts 1913-1926
  5. ↑ An important memorialñ . In: Cuban Revue . 1913 / III, February 2017, p. 108.