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It met bitter opposition by
Conservative Republicans who wanted to protect high
tariffs which led to the Aldrich proposal. The
compromise Payne-Aldrich Tariff Act had the effect of
reducing tariff rates but also enacted a corporation
tax. The Payne-Aldrich Tariff Act split the Republican
party. President Taft alienated both the Progressive and
conservative Republicans and gained a reputation for
being weak and indecisive.
Payne-Aldrich Tariff Act for kids: Background History
The previous president,
Theodore Roosevelt, had steered way from the controversial subject
of tariffs and no laws relating to tariffs were enacted during his
presidency. The 1897 Dingley
Tariff had been the last act passed and had increased duties
(taxes) by an average of 52% and on some items by 57%.
The 1897 Dingley Act was
designed to protect businesses and industries from foreign
competition.
Payne-Aldrich Tariff Act for kids: The Payne proposal
President William Taft
believed that high tariffs hurt consumers, limited competition and
protected trusts. Ignoring warnings from his friend Theodore
Roosevelt he supported a new tariff act to lower rates. New
York Representative Sereno E. Payne
sponsored a lower tariff bill. In 1909 President Taft called a
special session of Congress and the bill was passed by the House of
Representatives.
Payne-Aldrich Tariff Act for kids: Joseph G. Cannon
President Taft made a
deal with the Speaker of the House, Joseph G. Cannon to push through
the Payne proposal. Cannon was disliked by many of the Progressives
who wanted to unseat Cannon. Taft agreed to place pressure on
Progressive Republicans to stop the vendetta against Cannon who, in
return, would push the Payne proposal through the House of
Representatives. The Progressive Republicans were furious about the
deal and furious with the President.
Payne-Aldrich Tariff Act for kids: The Aldrich Proposal
The Conservative
Republicans were totally opposed to the Payne tariff bill. When the
bill went to the Senate, the conservative Republican Nelson Aldrich
attempted to substitute the Aldrich proposal which called for fewer
reductions and more increases in tariffs. The Aldrich proposal made
nearly 900 changes to the Payne bill.
Payne-Aldrich Tariff Act for kids
President Taft was persuaded by Aldrich and other
conservative Republicans to accept their proposals.
The Payne-Aldrich Act was produced as
a watered-down compromise consisting of elements from both the
proposals. President Taft signed the Payne-Aldrich Bill even though
he knew it would split up the Republican Party. Congress
subsequently passed the bill officially on April 9, 1909.
Payne-Aldrich Tariff Act for kids: Tariff Schedules
The Payne-Aldrich Tariff Act
published a schedule consisting of a charge list of tariffs, prices,
rates, etc., arranged or organized in a particular order. It lowered
taxes by about 5%.
Payne-Aldrich Tariff Act: Corporation Tax
Aldrich and the conservative Republicans conceded to
including a corporation tax in the final version of the law.
The corporation tax was a special excise tax of 1% above $5000 on
all corporations and also introduced the examination of the accounts
of corporations and trusts.
Payne-Aldrich Tariff Act: Effect of the Payne-Aldrich Tariff
Act
The effect of the Payne-Aldrich Tariff Act:
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President Taft alienated
both the progressive and the conservative Republicans and was mauled by
the press
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President Taft’s
compromise led to so much derision that in 1910 they defied the
president by joining with House Democrats and removed Joseph G.
Cannon from power
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Taft lost the presidential
election of 1912 and Woodrow Wilson was elected as the next
President
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The
1913 Underwood Tariff
Act re-imposed the federal income tax to Corporation
tax and lowered basic tariff rates
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In 1914 the hotly
contested Corporation Tax was merged into Income Tax
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