interest equalization tax

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Interest equalization tax

Tax on foreign investment by residents of the US which was abolished in 1974.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Interest Equalization Tax

A 15% tax on interest received from bonds originating outside the United States. Levied in 1963, its original intent was to stimulate dollar investment in American securities. The effect, however, was to stimulate the growth of euromarkets, that is, the growth of investment in dollars outside the jurisdiction of the United States. The interest equalization tax was removed in 1974.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

interest equalization tax

A tax, no longer in effect, that was levied on income received from foreign securities owned by U.S. residents. By discouraging investment in foreign securities, the tax was intended to prevent an outflow of U.S. dollars.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
destroyed its own international bond market with the introduction of interest equalization tax in 1963 and drove that market off-shore; and that we have an extremely beneficial regime of personal taxation, which makes this a great place to live.
The interest equalization tax, initiated in 1963, was a reaction to the growing issuance of foreign bonds in the United States: Markets for these issues were developing slowly in other counties, and interest rates were lower in the United States than abroad.
had abolished exchange controls in 1979, and we did the same in 1974 by phasing out the interest equalization tax.