Question

What did the Underwood-Simmons Tariff create?

A. It created a board which had oversight over tariffs.
B. It abolished tax rates for imports and exports.
C. It created lower tax rates for imports and exports.
D. It created higher tax rates for imports and exports.

Answer 1

The United States Revenue Act of 1913 also known as the Tariff Act, Underwood Tariff, Underwood Act, Underwood Tariff Act, or Underwood-Simmons Act (ch. 16, 38 Stat. 114, October 3, 1913), re-imposed the federal income tax following the ratification of the Sixteenth Amendment and lowered basic tariff rates from 40% to 25%, well below the Payne-Aldrich Tariff Act of 1909. It was signed into law by President Woodrow Wilson on October 3, 1913, and was sponsored by Alabama Representative Oscar Underwood.

Answer 2

The correct answer is C) It created lower tax rates for imports and exports.

The Underwood-Simmons Tariff created lower tax rates for imports and exports.

This is also known as the Revenue Act of 1913. This piece of legislation was passed in the times of the Progressive Movement in order to considerably reduce the tariffs on imported products. US President Woodrow Wilson firmly believed in progressive reforms and he considered that this act would help manufacturers in the United States to establish more competitive prices incrementing its efficiency.