HIGHER TARIFFS, LOWER REVENUES - ANALYZING THE FISCAL ASPECTS OF THE GREAT TARIFF DEBATE OF 1888

After the Civil War, Congress maintained high import tariffs to pay of f the public debt. By the early 1880s the federal government was runni ng large fiscal surpluses -revenues exceeded expenditures by over 40 p ercent. The Democrats proposed lower tariffs to reduce customs revenue . The Republicans:proposed higher tariffs to reduce imports and custom s revenues. This article attempts to determine the revenue effects of the proposed changes. Given the height of the tariff and the price ela sticity of U.S. import demand, the actual tariff was below the maximum revenue rate, and therefore a tariff reduction would have reduced cus toms revenue.