Differentiated Tariff Rates for "Toys" and "Dolls"
Blogger Matt Yglesias is shocked by the different U.S. tariff rates for toys and dolls:
You probably did not realize that the official legal position of Marvel is that contrary to the general thematic content of the Marvel Universe, mutants are not people. A recent Radiolab podcast brings the shocking true story, but it's easy enough to summarize: Marvel-licensed action figures are generally made abroad and imported into the United States. But "dolls" (which are representations of people) face a higher import duty than "toys" (which are representations of non-humans), so it's in the interests of Marvel to argue that X-Men action figures should be taxed at the low ... rate.
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What we have here is a federal 12% sales tax on dolls, but only if the dolls are made in foreign countries, and a different -- arbitrarily lower -- 6.8% federal sales tax on toys, but again only if the toys are made in foreign countries. There's no good reason to have special higher sales taxes on toys made in foreign countries, and there's certainly no good reason to tax dolls and non-doll toys at different rates.
This makes me think of a radical change to the current trade regime: Would it be a good idea if all countries adopted a single uniform tariff rate for all products, like Chile has (with limited exceptions)? At the very least, should there be WTO discussions about the harms caused by having so many different tariff rates? Would some limits on differentiation be useful?