Week in Insights: Taxes Supplanted Most Tariffs for Good Reason

The idea of substituting tariffs for taxes operates under the misleading premise that tariffs equate to taxes on foreign countries. Conflating tariffs and taxes glosses over important differences in fairness and equity between them.

Understanding the distinction would have been easier in late 19th and early 20th-century America, when tariffs—duties directly imposed on goods—were a significant source of revenue before Congress enacted a federal income tax in 1913. Anti-tariff sentiment was what made the income tax politically palatable to begin with.

Tariffs’ most obvious shortcoming is their regressivity. An imported widget that costs $100 and is subject ...