Taxes

Now It Makes Even Less Sense That Michael Scott Was Wearing a Woman's Suit

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This is a week or two old, but I don't think anyone has mentioned it here yet: The New York Times reports that several companies are challenging U.S. tariffs on imported clothing, arguing that they constitute illegal sex discrimination. For obscure reasons, similar articles of clothing are taxed at different rates when they're sold to men than when they're sold to women. Sometimes men come out ahead, and sometimes women do. Either way, the clothing manufacturers argue, such unequal treatment cannot stand:

After years of poring over dusty tariff lists, international trade court records and congressional testimony, lawyers have found nothing that explains why, say, the tariff on an imported wool suit is 8.5 percent for a woman and zero for a man.

"It's irrational," said Peter Bragdon, the general counsel at Columbia Sportswear, one of the companies suing the government.

Columbia Sportswear imports a rugged hiking boot from China called the Diamond Peak. The men's and women's boots are virtually identical. But the tariff on the women's version is 1.5 percent higher than the men's (10 percent, compared with 8.5 percent).

"I think any first-year law student would have the same gut reaction we did—wait, you cannot do that," Bragdon said….

[Another lawyer said he] found the differences "offensive" and likened them to a federal sales tax based on gender. "Who would stand for that? If you were to buy a shirt and it was 5 percent more only because you are a man or a woman you would be outraged—and people should be equally outraged at what is happening with tariffs."

His lawsuit, filed on behalf of Totes-Isotoner, the glove maker, asserts that different tariff rates for similar men's and women's clothing violate the Constitution's guarantee of due process and equal protection. (The tariff on seamed leather gloves, a top seller for Totes-Isotoner, is 14 percent for men's and 12.6 percent for women's.)

Unlike some other challenges to sex-based pricing, this is one I can get behind. But as the Times notes, there's a "slim" chance the government will resolve the differences by raising the lower tariffs rather than reducing the higher ones.

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  1. Drycleaners are next.

  2. Protectionists fighting among themselves.

    Think I’ll make some popcorn, pull up a chair and enjoy the show.

    “there’s a “slim” chance the government will resolve the differences by raising the lower tariffs rather than reducing the higher ones.”

    Kinda makes me think of the fat kid in our group when I grew up. We called him “slim”.

  3. > there’s a “slim” chance the government will resolve the differences by raising the lower tariffs rather than reducing the higher ones.

    Wait…so you think the government will lower tariffs overall?

  4. Pro Lib:

    are the drycleaners being taxed (or tariffed) at different rates for men and women?

    perhaps you’re referring to differential dry cleaning pricing for men’s and women’s items

    they’re private businesses setting their own policies. equal protection under the law doesn’t (or shouldn’t) apply.

  5. btw, Jacob, that old article of yours that you linked to appears to have its formatting all gakked up.

  6. the women’s version is 1.5 percent higher than the men’s (10 percent, compared with 8.5 percent)

    Damn, I hate this sort of reporting. Hate, hate. Bzzzffflt.

    A 10 percent tariff is not “1.5 percent higher” than an 8.5 percent tariff. It’s 1.5 percentage points higher. In pure percentage it’s actually about 18% higher: ((10 – 8.5) / 8.5) x 100

  7. biologist,

    I merely josh. Still, it’s good to be a man when it comes to having clothes drycleaned.

  8. It reminds me of the U.S. Income Tax Code. Capricious, chaotic, makes no sense at all, and adds to the cost of goods and services.

  9. Hmm, I just did a search for “income tax” and “women” in Google. Some interesting things came up: India gives tax rebates for women, and looks like they may have different tax rates; In Britain, up until 1990, only the husband could file a joint tax return; an article from just yesterday says Harvard University economist Alberto Alesina is advocating lower income tax rates for women:

    http://www.courant.com/business/hc-womentax0502.artmay02,0,609508.story?coll=hc-headlines-business

    Has U.S. tax law always treated men and women equally?

  10. For obscure reasons, similar articles of clothing are taxed at different rates when they’re sold to men than when they’re sold to women. Sometimes men come out ahead, and sometimes women do. Either way, the clothing manufacturers argue, such unequal treatment cannot stand:

    When I see the word “equal” used on Hit & Run, it usually triggers my Internal Bullshit Alarm. But, for once, it appears the complaint of “unequal” is actually justified (pending further developments, anyway).

    Congratulations!

  11. Pro L, I make a point of patronizing only dry cleaners that charge by the ornamentation or fabric, not the gender of the owner for precisely the reason you cite. My “Damascus Road” moment came when I realized I had paid $0.50 more per shirt for laundered shirts, even though all I had sent were SMALL SIZED MEN’S SHIRTS. That is, shirts that fit me but purchased in the men’s department. Go figure that one.

    That said, even though the tariff-world is twisted and illogical, this is particularly strange.

  12. So if no one else will mention it, The Office is the funniest show on TV.

  13. As Brian Williams reports he said to David Gregory one day, “You know, everything you’re wearing is also available in men’s colors.”

  14. Do the plaintiffs have an argument on the basis of sex discrimination if the discrepancies in rates work out equally across the board? That is, of 10 random sets of items, the tariff is higher for the women’s in 5 sets and higher for the men’s in the remianing 5.

    That being said, tax policy in general and tariff policy in particular is not terribly logical, consistant or fair because the government tries to micromanage the market through taxes. The underlying logic (such as it is) behind the differneces in rates is not readily apparent to the average citizen.

  15. Agreed, bob.

    “…And I made one tiny mistake. I wore women’s clothes.”

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