Democratic tariff reform bill that included a federal income tax.
Tariff questions played a key role in the election of Democratic President Grover Cleveland to a second (nonconsecu-tive) term in 1892. The Democratic Party included a tariff reduction plank in its platform. In a special session called by President Cleveland in 1894, the House, with a significant Democratic majority, moved quickly to enact tariff reductions through legislation written by the chair of the Ways and Means Committee, Democratic Representative William L. Wilson of West Virginia. The Democrats enjoyed a smaller majority in the Senate, and so the tariff reduction bill became loaded with protectionist amendments favoring high tariffs. Because the Senate bill differed from the House bill, a conference committee of members from both chambers had to reach a compromise. The House and Senate approved the compromise legislation, but President Cleveland indicated his dissent by not signing the bill. It became law without his signature in August 1894.
The Wilson-Gorman Tariff included the first federal income tax enacted since the Civil War. Persons with incomes over $4,000 paid a 2 percent tax. The U.S. Supreme Court ruled the income tax provision unconstitutional in 1895. The Wilson-Gorman Tariff removed the tariff on wool and simplified the rates on woolen products imported to the country. Many of the other rate changes involved slight reductions from the McKinley Tariff of 1890; the protectionists in the Senate blunted more significant reductions. The Wilson-Gorman Tariff reinstituted the tariff on sugar, resulting in an increase in revenue. The change also wreaked havoc on economic conditions in Cuba, which relied heavily on the American market for its sugar exports. Cuban exports to the United States fell more than 50 percent, leading to political strife that resulted in the Spanish-American War.
The Democratic Party lost much of its electoral support because of the lack of significant rate reductions in the Wilson-Gorman Tariff. The Democrats lost their majorities in both houses of Congress as voters swept many Democrats, including Representative Wilson, from office.
