The government has various ways of collecting its revenue, domestically; it is collected through government bonds, treasury bills and levied taxes. The government through its revenue collection agency levies taxes and duties on various services and commodities sold.
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This is either through income taxes where workers both in the government and established private companies and organizations remit taxes which are a stipulated percentage of their earnings. The goods sold with the country also attract duties what is commonly referred to as the Value Added Tax (V.A.T). Companies too are levied taxes on the basis of their nominal share capital.
Despite the noble contribution done by these kinds of domestic taxes, they are always in sufficient to support and sustain the government budgetary allocation not unless the government wants to render its citizens incapable of sustaining their livelihoods (Kaplan 120).
This leaves the government with no choice but to make levy taxes on the imports for a variety of reasons which look justified or unjustified depending on the purpose it is meant to serve.
The benefits accrued by the government levying taxes on goods entering its territory is to protect its territorial integrity where contraband products find their way into the economy thus causing security problems either health wise or proliferation of firearms from unknown sources.
There are some developed countries that export products they consider obsolete to be used in the third world countries thus using them as their site for dumping unwanted products (Johnson & Lee 110). These wastes especially e-wastes are a danger to our environment and this is why the governments will levy taxes to act as a punitive or penalty to such imports.
The self sustaining country is one that has its human resource developed and functional; so the levying of taxes on services offered from foreign experts helps the nation build capacity and develop homemade industries.
However, despite the benefits of levying taxes, there are also numerous dangerous and disadvantages of levying taxes. The levy of excessive taxes on imports harms the economy because it interferes with the balance of trade where countries shy away from trading with others they feel are exploitive.
The country also remains caged as foreign expertise that should otherwise build capacity of locals abscond and go to potentially friendly countries. Countries that rely on import of machinery especially less developed countries suffer in the long run as the levies on agricultural goods cannot give double coincidence.
This limits trade. Regional integration is also hampered because of tariff barriers will is a potential recipe for chaos and war.
The United States of America being caring nation, from start after world war II decided to caution its senior citizen from the misery associated with retirement by incepting four major funds which were Federal Old Age and Survival Insurance Trust Fund established in 1940.
The second was Federal Disability Insurance Trust Fund of 1956 and the last one was the Federal Hospital Insurance Fund and finally the Federal Supplementary Medical Insurance Trust Fund, both founded in 1965 (Eckes 720).
These funds were started as noble ideas though in the event of time, many emerging issues seem to be regressing the gains intended. This constitutes inflationary trends, world market dynamics, and unemployment rates have doubled over this period.
Now the greatest question is whether the federal government should increase the expenditure on the social security funds or not. However, there is no specific answer to this question. This indifference is brought about by the schools of thought adduced by various stakeholders of the issue.
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There are those who believe that to mitigate the problem, the special US Treasury bond should consider converting them into cash. This means that future taxes in addition to social security taxes and new federal borrowing will be in cash form. There are those who want pay-as-you-go funding while others support the trust fund investment in assets other than US Treasury bills. Nevertheless, it is the citizens who advance Socialism.
Eckes, Alfred. Opening America’s Market: U.S. Foreign Trade Policy since 1776. New York: Journal of Law and Economics, 51 (Nov. 2008), 715–42.
Johnson, Walter & Lee, Raymond. Public budgeting systems (8th ed). Sudbury, MA: Jones and Bartlett, 2008.
Kaplan, Edward. American Trade Policy. Washington: Greenwood Press, 1994.