Taxes and Tariffs in the Early Republic
Protective Tariffs – high tariffs (taxes on imports) protect domestic (U.S.)
manufacturers from foreign competition who sell their products at lower prices. The
other side is that high tariffs prevent consumers from purchasing the foreign products at
lower prices. High tariffs on foreign goods on common purchases were favored by
North because their economy was based on manufacturing. Tariffs caused
economic hardships in the South because of the amount of goods that the South
purchased from Europe. Congress endorsed high tariffs on any goods manufactured
in Europe. Many Americans welcomed these protective tariffs, especially Americans
living in the Northeastern states where industry thrived. Southerners were in
disagreement with the protective tariffs because Americans would now have to pay
higher prices for goods manufactured in the U.S.
Taxation – high taxes take money away from the consumer, so the government
can provide services and infrastructure that benefit the economy and the citizens. Low
taxes leave more money for the consumer to spend and stimulate economic
growth; effected southern economy more than north. Most taxation was based on
tariffs. Andrew Jackson opposed a strong central government and opposed
unreasonable taxation exercised by the federal government. Jackson believed that
taxation could quickly lead to an abuse of power and control over the American people.
How did Alexander Hamilton raise revenue for the federal government under the
Washington administration? ____________________________________________
What was one item that Alexander Hamilton put a tax on under the Washington
administration? ______________________________________________________