Office of the Historian

92. Memorandum From Vice President Humphrey to Secretary of the Treasury Fowler1

Washington, April 29, 1966.

Following are my comments on the memorandum entitled “Tax on Tourist Travel.”2

1.
If the tax would save from $585 million to $1.17 billion in foreign exchange per year, as estimated, it certainly should be given serious consideration.
2.
It should be considered, however, in context of our overall travel program, its effect on other components of it, and of our long-standing policies favoring freedom of movement and exchange.
A.
When press reports of such a contemplated tax appeared last year, an immediate increase resulted in purchase of tickets to foreign destinations and of passport renewals—reportedly by people trying to get in under the wire before imposition of any such tax. We might be prepared for a repetition of this, which would, for a short time at least, result in a greater outflow than previously.
B.
A good share of the support we now enjoy from the travel industry, from other parts of the private sector, and from the communications media for our positive, voluntary Discover America program is due to the fact that the program has not entailed restrictive measures.3 I have no doubt there would be an immediate loss of support—and, in fact, active opposition—among large parts of these groups were restrictive policies now introduced.
C.
It would seem that only the most desperate of situations should compel us to take steps toward reversal of our traditional policies encouraging freedom of movement and exchange. Not only would adverse public reaction ensue, but we might well expect general retaliation from foreign governments.
3.
In summary, I would support such a travel tax only as a “last resort” in closing the travel gap. I would recommend, before taking any such step, that we first adopt other measures as outlined in my memo to you of April 19.4 That is:
A.
United States Travel Service budget increase and expansion.
B.
Reduction in the present duty-free tourist exemption.
C.
Increase of the present passport fee.
D.
Intensification and reorientation of our voluntary Discover America Program.
  1. Source: Johnson Library, Fowler Papers, International Balance of Payments Committee—Classified Material:B/P Travel Expenditures Restraints [1 of 2], Box 46. Confidential.↩
  2. Document 87.↩
  3. Regarding this program, see footnote 7, Document 5.↩
  4. Not found.↩