Bad Tax of the Day, Ironing Board Edition

Who says we don’t make anything anymore?  Thanks to a tariff of 70% to 150% on Chinese ironing boards, we still have one factory in Indiana that churns out ironing boards for Target, Wal-Mart, and other large retailers.

While I get that manufacturing jobs have collapsed over the past thirty years, this doesn’t mean that we aren’t producing anything as a country.  In fact, we’re producing more than ever, and imposing a tariff on a low value-added good only staves off the inevitable.  Tariffs nearly always highlight the asymmetry of power concentrated interest groups, in any society, enjoy; they exist to protect one set of people at the expense of others, both foreign (the manufacturer and its workers) and domestic (consumers).

Taxes are beneficial when they are normative, not when they are tools of special interest groups.  We can argue about these norms, but it should be axiomatic that small targeted tariffs should not be part of our policy framework.  But as Yglesias points out:

The problem for me is that with unemployment at nearly 10 percent and projected by the Powers That Be to stay above 8 percent for years it’s really hard for anyone to say with a straight face that if the factory closes down the employees will be able to find new jobs. Those adjustments are always difficult to make, but given healthy labor markets they’re very possible. Given today’s labor market, I don’t think you can say that with a straight face. Which means the longer elevated unemployment persists, the more random trade barriers we’re going to see, not just in this country but in countries all around the world. And over the long haul, that’s going to reduce the world’s overall ability to produce things and earn income.

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