In an article titled, “A Quiet Break for Corporations,” Washington Post reporter Joe Stephens casts a small family-owned business as his protagonist in a story that attacks Wal-Mart and other corporations for lobbying Congress to suspend tariffs on products they import. As Ramesh noted earlier, “… if reporter Joe Stephens had time to talk to a single economist, or consider for an instant the effects of lower tariffs on the economy in general, he keeps it to himself.”

I e-mailed Dan Griswold, director of the Cato Institute’s Center for Trade Policy Studies, to ask him about Stephens’s decision to focus on lost tax revenue instead of the harmful economic effects of these tariffs. He wrote back:

The story is really outrageous in its assumption that the government’s ability to collect a pittance of revenue trumps the interest of consumers, import-using companies, and the general competitive health of the U.S. economy.

Griswold also wrote about the benefits of tariff suspensions in a study of trade votes in the 108th Congress:

The Miscellaneous Trade and Technical Corrections Act of 2004 represents the kind of unilateral free trade Congress should practice more often. It suspends duties on hundreds of specific imported goods, including chemicals and dyes, textile machinery, railway passenger cars, and “a replica of the Liberty Bell imported from the Whitechapel Bell Foundry of London, England, by the Liberty Memorial Association of Green Bay and Brown County, Wisconsin,” while refunding duties paid on certain previously imported goods. One of the most annoying aspects of Stephens’s article is illustrated by the following passage:

Lobbyists and lawmakers said many tariff suspensions aid small businesses. The savings “can be especially meaningful for a small company, or one struggling to stay afloat in the United States,” Senate Finance Chairman Charles E. Grassley (R-Iowa) said in a statement.
But The Post’s analysis of data from nearly 600 trade commission reports from this session of Congress found that the biggest winners are not small U.S. firms but rather domestic subsidiaries of European corporations.

Contrary to Stephens’s use of the word “But…,” the Post’s analysis doesn’t contradict Grassley’s claim. Stephens is using the same rhetorical slight-of-hand that Democrats used to oppose Bush’s tax cuts — the rich, he writes, are the “biggest winners.”

It doesn’t take a sophisticated data analysis to figure out that those who pay a disproportionate share of a tax benefit disproportionately when that tax is cut! But that doesn’t mean that those who pay a smaller share of the tax don’t also benefit — of course they do.

Stephens’s construction — “Grassley said… But The Post’s analysis… found” – falsly implies that tariff suspensions are a zero-sum game between small companies and big corporations. To the extent that the former don’t benefit as much as the latter, well, maybe that’s because small companies don’t pay as much of these unfair taxes to begin with.