A bi-partisan coalition of 11 Senators led by Sen. Abraham Ribicoff (D. Conn.) has drafted legislation that would deny major tax benefits to any American company that cooperates with the Arab boycott of Israel by discriminating against American concerns blacklisted by the Arabs.
The legislation, scheduled to be introduced by Ribicoff tomorrow as part of the U.S. Internal Revenue Code, is described by its sponsors as complementing other anti-boycott measures already being considered by the Senate as well as President Ford’s own directive last year barring discrimination against Americans by U.S. government agencies.
The Ribicoff measure would deprive any company that complies with the boycott of its eligibility for foreign tax credits, tax deferral on its foreign sources of income and Domestic International Sales Corporation (DISC) benefits for one tax year on its dealings with any country sponsoring the boycott.
ECONOMIC SELF-INTEREST
Ribicoff estimated that 3000 American firms are boycotting 2000 blacklisted companies, many of which are American. He said that U.S. government policy is to discourage American firms from participating in the boycott while not directly prohibiting it.
The widespread discrimination that has resulted from American participation in the boycott is not based on moral prejudice but on economic self-interest, Ribicoff said. He said his proposal “provides strong disincentives to cooperation and clear guidelines to determine compliance.” He emphasized that “this bill will make non-compliance a viable alternative to many of our corporations without compromising our relations with any nation or our overall foreign policy.”
The co-sponsors of Ribicoff’s bill are Senators Birch Bayh (D.Ind.), James L. Buckley (C-R.NY), Vance Hartke (D.Ind.), Jacob K. Javits (R.NY), Patrick J. Leahy (D.Vt.), Edmund S. Muskie (D. Maine), William Proxmire (D. Wisc.), Richard S. Schwelker (R.Pa.), Lowell P. Weicker (R.Conn.) and J. Harrison Williams (D.NJ).
Meanwhile in Minneapolis, General Mills, the Pillsbury Co., the First National Bank of Minneapolis, and the First National Bank of St. Paul denied a charge made last Thursday by the Anti-Defamation League of B’nai B’rith that they are complying with the Arab boycott.
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