Financial Repression Tracker

Rules that steer savings into government debt or hold returns below inflation, country by country.

Block · Capital controls

Interest equalization taxes on residents' purchases of foreign securities

What it is
An excise tax on residents' acquisitions of foreign stocks and long-dated foreign bonds, calibrated to offset the interest-rate gap between home and abroad.
Why it counts
By wiping out the extra yield of foreign securities it keeps domestic savers in home-currency assets at lower domestic rates, supporting cheap domestic borrowing and the balance of payments.

When it was in force

  • United States: 1963 → 1974, historical

Example

  1. United States

    1963 → 1974Historical

    Americans paid a tax on purchases of foreign stock and foreign debt with three or more years to maturity, to stem dollar outflows; it was extended several times and ended in 1974.

    Interest Equalization Tax Act, Pub. L. 88-563, 78 Stat. 809 (2 September 1964; Internal Revenue Code chapter 41, ss. 4911-4920, retroactive to 18 July 1963)Secondary source
    “This tax was designed to increase the cost to foreigners of obtaining long-term capital in the United States.”

    history.state.gov (opens in a new tab)Checked: quote matched on the page by script

    United States today: index 42.9

Examples and their dates reviewed .

Further reading

7 more on capital controls