501.BB/10–449: Telegram
The United States Representative at the United Nations (Austin) to the Secretary of State
Delga 53. GADel, after detailed consideration income tax exemption and reimbursement questions,1 concerned damage US position earnest support UN by continued failure to adopt required legislation and notable inconsistency US position on contributions in light US lack of action on taxes.
Total amount tax reimbursements now approach $900,000. To representatives many countries larger budget item than total cost foreign offices. Other member contributions to this item approximately $600,000 considered even by delegations friendly to US as direct contribution US Treasury.
Great importance attached to additional action by executive particularly in the light of statements by last GADel generally interpreted by other delegates promise by executive branch for strong pressure Congress necessary legislation. Much of beneficial effect US approval UN building loan as well as general US support UN may be lost if US unable to offer adequate answer to tax question.
GADel believes that it has responsibility, if requested by other members, to state clearly status in Congress of proposal for exemption and probable time Congress will make decision whether favorable or unfavorable. GADel suggests Department may wish to renew appeal to Congress for action along lines already proposed (1) acceptance [Page 70] of the privileges and immunities convention, including provision for complete exemption US nationals in secretariat from taxation, or (2) amendment of internal revenue double taxation provisions to provide for credits on US income taxes of staff contributions paid UN.
Difficulty any Congressional action this fall fully recognized, but GADel has noted statement chairman appropriate committee that tax revision will be undertaken next year. Suggest possibility renewed request for action by the President or Secretary followed by comment or statement from committee chairman or leaders indicating that subject will be fully considered and Congressional decision made early next session. Recognized leaders cannot commit as to outcome but firm decision to fully consider January would be most helpful.
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The U.S. Delegation engaged in lengthy discussion on this matter on October 3, which was continued on October 4 (IO Files, Minutes of the 12th and 13th meetings of the U.S. Delegation, documents US/A/M(Chr)/106 and US/A/M(Chr)/107). At the latter meeting, it was
“pointed out that the draft telegram before the Delegation attempted to explain our concern at the failure of the Congress to take action on legislation regarding tax exemption of United States nationals on the Secretariat. [The Congress was in its last weeks, adjourning on October 19.] It stated our intention to make a forthright admission of this fact in the committee [the Fifth Committee of the General Assembly] and urged the Department to request the President or the Secretary to renew the request for legislative action in the hope that a statement might be forthcoming from the chairmen of the appropriate committees that action would be undertaken early next year. It was hoped that such a statement might be obtained before the item came up on the agenda [of the committee]. Of course, it was realized that no commitment could be made as to whether the action taken would be favorable.” (ibid.)
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