Tax Dodge

In railway and airline offices on the Canadian side of the Canada-U.S. border many a U.S. citizen queued up last week and bought his ticket from a Canadian agent. In the same offices, almost every mail brought letters from the U.S. with orders and checks for plane and train tickets between U.S. points. More & more Americans were getting wise to the fact that they could get bargains in transportation by buying their tickets in Canada.

In her 1949 budget, Canada had cut off the 15% wartime excise tax on air and rail tickets (TIME, May 23). In the U.S., a 15% tax was still on. The knowing traveler simply mailed his ticket order to a Canadian office (or went in person if he lived at a border point such as Detroit or Buffalo) and saved himself the amount of the tax. Sample saving on a round trip from Washington to Los Angeles: $25.42.

Last week the U.S. Bureau of Internal Revenue admitted that such transactions were legal and that the number of people who had taken advantage of them was "way up in the thousands." It hoped before long to find some way to plug the leak of U.S. tax revenue.

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