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Article: Duties, Ad Valorem and Specific
- Article from:
- Dictionary of American History
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DUTIES, AD VALOREM AND SPECIFIC
DUTIES, AD VALOREM AND SPECIFIC.
Duties are levied upon imports, ad valorem as a percentage of their price and specific as a fixed amount per unit. Both are a source of revenue for the government. Ad valorem duties provide the least protection when imports are inexpensive; conversely, protection is greatest when imports are expensive and therefore fall in volume. Specific duties prevent a reduction in revenue when prices fall so they were often favored for commodities which have unstable prices. Customs administrators generally prefer specific rather than ad valorem duties, in particular because of the difficulty in determining the correct value of the ...