Excise taxes as a substitute for tariffs

Excise taxes to provide protection for domestic industries were introduced in the Revenue act of 1932. The list of commodities subject to such taxes was considerably extended in 1934 and 1936, notwithstanding the more liberal trade policies of the Administration. Protective excise taxes are of two types, those on the importation and those on the domestic processing of goods of foreign origin. From the protectionist point of view, excise taxes possess certain important technical advantages over tariffs, but in general they are very similar both in character and effects. Their principal significance lies in the extent to which they open the way to familiar protectionist abuses.