The shoe tax is yet another example of a government program left in place without any serious evaluation of whether it is accomplishing its original goal. The shoe tax was first imposed back in the 1930s to protect a U.S. shoe industry that no longer exists. Less than 1 percent of all shoes sold in the United States are made here, and most of them are high-end dress shoes.
But Congress loves tax revenue, which it needs to fund its political hobby horses. So it is loath to tinker with programs that raise revenue; the shoe tax rakes in $2 billion each year, at the expense of hard-working Americans who just want to buy decent shoes for their kids. Because of the bizarre formula used to calculate the tariff, a large chunk of the tariff money is the result of taxing imports of exactly the sorts of casual and sports shoes that parents need to buy for their kids.
The shoe manufacturing industry — foreign and domestic — and retailers are pressing Congress to repeal the shoe tax, but there’s been little action on Capitol Hill.
This isn’t a trade issue.
There is no substantial domestic shoe industry left to protect, and the few American shoe companies that remain are sufficiently specialized to ward off foreign competition on their own.
This issue is really about congressional greed, and whether it will prevail over Americans’ right to freely obtain everyday goods without undue government interference.