TAX RELIEF IN U.S.

Press, Volume XCVIII, Issue 28890, 9 May 1959, Page 4

TAX RELIEF IN U.S.

Backward Area Investment

(N.Z. Press Association—Copyright) NEW YORK, May 7. The Administration yesterday lined up behind a Congressional drive to give United States businessmen tax relief on their foreign investments, United Press International reported.

But it said such tax relief should be given only for investments in “critical” underdeveloped parts of the world such as the Middle East, Asia, Africa and Latin America. A Government official said a tax benefit programme with no geographical limits would mean a loss to the Government of up to 50U million dollars a year and be “fiscally unsound” at this time.

The Administration’s position, modified from an adamant opposition to any major tax revisions, was outlined by the Treasury Secretary (Mr Robert Anderson), in a letter to the House of Representatives Ways and Means Committee, which is responsible for tax legislation. Mr Anderson said his report was supported "in substance” by the State and Commerce Departments. He said the Budget Bureau had expressed no objections.

Mr Anderson said specifically that the Administration would support these three of the proposals ■ advanced by representative Hale Boggs (Democrat, Louisiana) in a far-reaching tax relief bill:

(1) Deferment of taxes on income derived by a corporation which substantially gained its income from investments in one or more of the less developed areas of the free world. (2) Ordinary loss treatment on losses incurred by original investors on stock of such corporations. (3) Tax sparing, by treaty or negotiated agreements, to make it possible for American firms investing in an underdeveloped country to benefit from tax inducements offered by such a country to attract new capital.