By SMF, NARA, Date 3/28/00
The White House
Memorandum for the President
From: Robert C. McFarlane
Subject: Proposed Reply to Mrs. Thatcher on Unitary Taxation
Mrs. Thatcher wrote to you concerning unitary taxation just prior to the May 1 meeting of Don Regan’s Working Group (Tab B). She urged a “satisfactory” resolution of this question.
You will recall that Mrs. Thatcher both wrote to you and made strong personal representations when you met last fall about the negative impact of unitary taxation. The British, who are the largest foreign direct investors in the United States, are by no means alone in objecting to the tax. It has become an irritant in our relations with all our major trading partners. As a result, last October you formed a Working Group under Don Regan’s chairmanship, with members from the private and public sectors – both at the state and federal level.
In its May first meeting the Working Group agreed to recommend to the states that they adopt a “water’s edge” limitation on the application of the unitary tax. Your reply informs Mrs. Thatcher of the Working Group’s recommendation and notes that you will urge the states to implement this recommendation as quickly as possible.
That you sign the reply at Tab A to Mrs. Thatcher.
[The President initialled his consent.]