Executive Order 11754—Modifying Rates of Interest Equalization Tax

WHEREAS, I have determined that the rates of tax prescribed under section 1 of Executive Order No. 11464, dated April 3, 1969, with respect to acquisitions of stocks of foreign issuers and debt obligations of foreign obligors made after April 4, 1969, are higher than the rates of tax necessary to limit the acquisitions by United States persons of stocks of foreign issuers and debt obligations of foreign obligors within a range consistent with the balance-of-payments objectives of the United States;

Now, THEREFORE, by virtue of the authority vested in me by section 4911 (b) (2) of the Internal Revenue Code of 1954, and as President of the United States, it is hereby ordered as follows:

SECTION 1. Section 1 of Executive Order No. 11464, dated April 3, 1969, is hereby amended to read as follows:

"SECTION 1. Rates of Tax.

"(a) Rates applicable to acquisitions of stock. The tax imposed by section 4911 of the Internal Revenue Code of 1954 on the acquisition of stock shall be equal to 3.75 percent of the actual value of the stock.

"(b) Rates applicable to acquisitions of debt obligations. The tax imposed by section 4911 of the Internal Revenue Code of 1954 on the acquisition of a debt obligation shall be equal to a percentage of the actual value of the debt obligation measured by the period remaining to its maturity and determined in accordance with the following table:

The tax as a percentage of actual value is:

"If the period remaining to maturity is:

At least 1 year, but less than 1 1/4 years ..... 0.26 percent

At least 1 1/4 years, but less than 1 1/2 years ..... 0.33 percent

At least 1 1/2 years, but less than 1 3/4 years ..... 0.38 percent

At least 1 3/4 years, but less than 2 1/4 years ..... 0.46 percent

At least 2 1/4 years, but less than 2 3/4 years ..... 0.58 percent

At least 2 3/4 years, but less than 3 1/2 years ..... 0.69 percent

At least 3 1/2 years, but less than 4 1/2 years ..... 0.89 percent

At least 4 1/2 years, but less than 5 1/2 years ..... 1.09 percent

At least 5 1/2 years, but less than 6 1/2 years ..... 1.28 percent

At least 6 1/2 years, but less than 7 1/2 years ..... 1.45 percent

At least 7 1/2 years, but less than 8 1/2 years ..... 1.63 percent

At least 8 1/2 years, but less than 9 1/2 years ..... 1.78 percent

At least 9 1/2 years, but less than 10 1/2 years ..... 1.93 percent

At least 10 1/2 years, but less than 11 1/2 years ..... 2.08 percent

At least 11 1/2 years, but less than 13 1/2 years ..... 2.28 percent

At least 13 1/2 years, but less than 16 1/2 years ..... 2.58 percent

At least 16 1/2 years, but less than 18 1/2 years ..... 2.84 percent

At least 18 1/2 years, but less than 21 1/2 years ..... 3.06 percent

At least 21 1/2 years, but less than 23 1/2 years ..... 3.26 percent

At least 23 1/2 years, but less than 26 1/2 years ..... 3.44 percent

At least 26 1/2 years, but less than 28 1/2 years ..... 3.59 percent

28 1/2 years or more ..... 3.75 percent"

SEC. 2. With respect to acquisitions of stock of foreign issuers and debt obligations of foreign obligors made under the rules of a national securities exchange registered with the Securities and Exchange Commission or under the rules of the National Association of Securities Dealers, Inc., this order shall be effective for acquisitions made after December 31, 1973, but only if the trade date was after December 31, 1973. In the case of other acquisitions of stock of foreign issuers and debt obligations of foreign obligors, this order shall be effective for acquisitions made after December 31, 1973.

RICHARD NIXON

The White House,

December 26, 1973.