135. Editorial Note

On July 31, 1967, President Johnson signed into law the Interest Equalization Tax Extension Act of 1967 (P.L. 90–59; 81 Stat. 145). This legislation [Page 394] extended the term of this tax, first enacted on September 2, 1964 (P.L. 88–563; 78 Stat. 809), from July 31, 1967, to July 31, 1969. It also provided for a 1 percent increase in the tax on interest charged to foreign borrowers obtaining capital by selling securities to U.S. creditors, and gave the President discretionary authority to drop the tax or increase it to as much as 1.5 percent. The act also called for an increase in the tax by 1.5 percent from January 26, 1967, the day after President Johnson asked Congress for this legislation, until 1 month after enactment when it would revert to 1 percent unless the President ordered continuation of the existing rate or some other rate.

Regarding the President’s proposal for this legislation, see Document 117. On August 28, 1967, President Johnson issued Executive Order 11368, which reduced the Interest Equalization Tax from 1.5 to 1.25 percent. For text, see Department of State Bulletin, September 25, 1967, pages 396–397.