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The National Retail Federation is pressing Congress to pass legislation that would eliminate tariffs on a wide range of low cost imported shoes. NRF charges that the 70 year old "shoe tax" is outdated and estimates that its repeal would save shoppers about $800 million a year.

The bill to eliminate the tariff is the Affordable Footwear Act, S. 730, which was introduced March 26 by Senator John Ensign, R-Nev., with Senator Maria Cantwell, D-Wash., as the bill's lead cosponsor. "This legislation would finally eliminate an outmoded, hidden and regressive tax that needlessly drives up the cost of the majority of shoes and other footwear sold in the United States," said Tracy Mullin, NRF president and CEO. "Substantially lowering their cost would provide much needed relief for American families struggling through the current economic crisis.

"The shoe tax was adopted to protect a domestic industry that for all practical purposes no longer exists," Mullin said. "Ironically, the tariff rates are highest for the lowest cost shoes, meaning that low income families are paying far more than they should for one of life's basic necessities. It's time to retire Depression era trade policy."

The legislation would eliminate tariffs on about 60 percent of shoes imported into the U.S., or nearly 1.5 billion pairs annually. It would apply to low cost men's, women's and children's footwear ranging from sneakers to high heels. With the market for low cost shoes being highly competitive, most of the savings would be passed on to consumers.

Ranging as high as 67.5 percent, the tariffs were imposed in the 1930s to protect U.S. shoemakers against foreign competition, but domestic manufacturers today account for less than two percent of U.S. shoe sales. The legislation would eliminate about $800 million of the approximate $1.7 billion collected each year, according to the NRF.

Tariffs would remain in place for high end luxury footwear and for about 20 categories of footwear still made in the U.S. Many of those are special purpose shoes where price is seen as a secondary factor.

Article ID: 1078