End The Shoe Tax: Bill in Congress Could Reduce Shoe Prices Up to 40%

What:Sens. Gordon Smith, R-Ore., and Maria Cantwell, D-WA recently introduced a bill in Congress, called The Affordable Footwear Act of 2007, the would reduce/eliminate import tariffs (aka “shoe tax”) on low to moderately priced footwear ($50 or less).

The Lowdown: From the Portland Business Journal: The Affordable Footwear Act of 2007 would eliminate the import tariffs, collectively known as the shoe tax, on all lower- to moderately priced footwear as well as all children’s shoes, or about 60 percent of all shoes sold in the United States. The bill would roughly affect shoes that cost $50 or less.

What I say:
Over 99% of shoes sold in the US are imported and apparently higher end shoes aren’t subject to the import tax. According the people at the Affordable Footwear Initiative (aka the lobbying group, American Apparel and Footwear Association), the price of shoes could be reduced by as much as 40%. However, the real question is whether manufacturers and/or retailers would pass those savings on to consumers.

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Comments

  1. galalefey says

    I think I’d be happy if a lot of foreign companies took the extra money and used it to pay their employees living salaries.

  2. stylesmartie says

    Great post! I actually heard a piece on NPR about this over the summer before the bill was introduced. http://www.npr.org/templates/story/story.php?storyId=10991519
    It’s surprising that the congressman they spoke to in this piece placed the odds of the bill passing at 50-50. I guess that’s just our political system.

    TBF, can you really see retailers not passing on the savings to consumers? If markets work correctly, shoe prices would have to go down if the tariff were eliminated because eventually one shoe retailer would undercut prices to gain more market share and every other retailer would have to follow or lose business. It seems like there are too many retailers to maintain a cartel-like price fix. Shoe producers overseas couldn’t maintain a post-tariff markup for the same reason. Markets working correctly is a big “If” though.

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