It's a charitable interpretation but there's a lot of specifics at play here. The tax was not 1%. It was defined as a fixed 20-cents per person, not a percenta

It's a charitable interpretation but there's a lot of specifics at play here. The tax was not 1%. It was defined as a fixed 20-cents per person, not a percentage of income. The wording of the law was that the US government would use the funds for health care for the seaman and any surpluses for building hospitals and related facilities. It had no open ended mandate to provide coverage beyond the sums collected. It could be argued that maritime commerce, by its very nature, is a Federal jurisdiction, thus operating within the Federal governments power (in contrast to the rest of us landlubbers).