Statement by the President Upon Signing the Foreign Investors Tax Act and the Presidential Election Fund Act

I have today signed the Foreign Investors Tax Act of 1966.

This law ends the confusion and complexity that have long plagued our system of taxing the foreign investor. It makes our tax rules fairer and simpler, brings them up to date, and removes those tax roadblocks which have discouraged foreign investments in this country. The law will help to improve our balance of payments position and will thus strengthen our economy.

The act is the first major revision of the foreign investors tax structure in more than 30 years. It is the product of a task force of distinguished bankers and businessmen headed by Secretary of the Treasury Henry H. Fowler.

An important addition to this act breaks new ground in the financing of presidential election campaigns.

As a nation, we have long been concerned with the way presidential campaigns are financed. More than 60 years ago, Theodore Roosevelt observed that the Federal Government should help pay the expenses of a man running for the Presidency to eliminate the danger of undue influence by wealthy campaign contributors.

In recent years, soaring political campaign costs have intensified our concern and our search for solutions.

The approach adopted by this act allows the individual taxpayer--voluntarily--to have $1 of his tax payment placed into a presidential campaign election fund.

Congress has wisely chosen the Comptroller General and a bipartisan advisory board to safeguard and supervise the fund, which is held in trust for all Americans.

Presidential candidates will no longer have to rely on special interest groups and the rich to meet the heavy financial burden of a campaign.

Instead, they will rely on all Americans from every walk of life--the ideal way in a free country.

And thus our deeply rooted system of free elective government will benefit.

The new law is only a beginning. It underscores the pressing need to reform our antiquated Federal laws on the disclosure and regulation of campaign financing. Indeed, that task must be pursued with even greater urgency.

Last May I recommended that the Congress enact the Election Reform Act of 1966. That proposal was aimed at modernizing, correcting, and systematically overhauling our campaign financing laws--which are now more loophole than law. It sought full disclosure by Members of Congress of gifts and income.

Next year, I shall call upon Congress again to consider these positive and corrective measures to insure public confidence in the elective process. There is no higher duty of a democratic government than to insure that confidence.

I am also asking a bipartisan group of our very best political scientists and experts-headed by Prof. Richard Neustadt of Harvard--to see how the promise of the new presidential campaign fund law can be fully realized and to review the problems of election reforms and campaign financing in nonpresidential elections.

The Foreign Investors Tax Act contains a variety of other amendments. Many of these are minor technical changes usually dealt with by separate bills.

Others are more important. Several of these do not promote a fair and sound tax system. Instead they confer special tax windfalls and benefits upon certain groups. I deeply regret that these riders have been engrafted on this vital legislation.

However, the act's comprehensive and long overdue revision of our system of taxing foreign investors--thus helping our balance of payments position--and its precedent-setting provision for financing presidential campaigns are far too important to all the people of America to be delayed until future years. It is because these provisions are of overriding significance to the public interest that I have signed the act into law today.