Bad News for Big Spenders

One program that has Wilbur Mills's valuable support is the tourist tax package that Lyndon Johnson is submitting to Congress this week. "We are going to do something about this," vowed Mills, and while it might not be precisely what the Administration has in mind, it will be designed to assuage the itch for travel that propels about 3,000,000 Americans--and 2 billion American dollars--overseas each year.

To cut spending on travel outside the Western Hemisphere by $350 million a year, part of a program to trim $3 billion from the estimated $3.5 billion to $4 billion balance of payments deficit, Johnson has set his sights on the big spenders. His major proposals: 1) a tax, effective May 1, on expenditures by travelers abroad of more than $10 a day, which is scarcely enough to pay for the sauce bearnaise on the tournedos at Maxim's; 2) a 5% tax on ship and air fares to the Eastern Hemisphere; and 3) cuts in the $100 customs duty allowance for goods purchased abroad, and abolition of exemptions for gifts costing less than $ 10.

Students and teachers who already swear by Arthur Frommer's penny-pinching guidebook Europe on $5 a Day will escape most of the taxes, as will tourists who visit kinfolk in the old country. Though details have not yet been worked out completely, the tax for average daily expenditures above $10 may come to a flat 20%, or it may go as high as 40% for everything over $20 a day.

The proposed taxes are hardly likely to clip the jet set's wings. "I don't want to be the only one staying in America," says Marylou Whitney, wife of Racehorse Owner C. V. Whitney, who likes to visit Europe in the fall. Nor are notable numbers of tourists switching from the Alps to the Tetons, or from the music festival in Salzburg to Hemisfair in San Antonio. "We can't put our hands on a single cancellation," says Boston Travel Agent Bruce A. Rogal. Moreover, the State Department reports a 20% increase in passport applications.

Though Congress initially looked askance at travel taxes, it came around to the realization that some action was needed to stem the outflow of gold and dollars. "We can't cure the balance of payments situation by keeping a few tourists home," said Wisconsin's Congressman John Byrnes, but he conceded that he would vote for the taxes if the President proposed other measures as well to plug the drain.

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