The 1984 repeal of the withholding tax on foreign investors: A study in US domestic and foreign economic policy.
Item
-
Title
-
The 1984 repeal of the withholding tax on foreign investors: A study in US domestic and foreign economic policy.
-
Identifier
-
AAI9119607
-
identifier
-
9119607
-
Creator
-
Ammendola, Giuseppe.
-
Contributor
-
Adviser: Dankwart A. Rustow
-
Date
-
1991
-
Language
-
English
-
Publisher
-
City University of New York.
-
Subject
-
Political Science, International Law and Relations | Economics, Finance
-
Abstract
-
This study examines the US legislation of July 1984 repealing the thirty percent withholding tax on interest paid to foreign holders of bonds issued by the US government, its agencies and US corporations throughout all the stages of the policy-making process. It applies a six-phase model that provides the analytical framework which follows the life cycle of the issue and which incorporates at the same time theoretical approaches borrowed from political science, economics and finance. The descriptive and explanatory abilities of the model are shown through the examination of the complex interaction existing among Congress, the President, the Treasury and Corporate America.;The study shows the importance of access to foreign capital for the United States public and private borrowers against a background of upcoming Congressional and Presidential elections, budget deficits and unemployment. The Treasury Department, driven by its need to fund the US budget deficit, and Corporate America, wanting to maintain and expand its access on a tax-free basis to foreign capital markets joined forces powerfully and decisively to lobby Congress to repeal the withholding tax. The study looks at the difficulty of implementing the legislation and documents the widely held notion that tax policy is complex and at times nonlinear and ambiguous.;The examination of the summer 1987 crisis originating from Treasury's declaration that it would terminate the US treaty with the Netherlands Antilles suggests that the theoretical models developed to examine crisis decision-making in security areas can be extended to non-security issues.;Statistical evidence shows that the repeal has contributed to the lowering of the level of interest rates in the United States and that it has increased the integration of the international capital markets. In light of the history of US foreign economic policy since World War II, the decision to repeal the thirty percent withholding tax and thereby to increase the competition for the world's savings conforms to the typical unilateralist mode of US decision-making. Thus an interesting paradox emerges: a decision arrived at without consulting the US major economic partners and with domestic considerations in mind has also contributed to greater interdependence of the world financial markets and economies.
-
Type
-
dissertation
-
Source
-
PQT Legacy CUNY.xlsx
-
degree
-
Ph.D.
