Case #760.0

Interest Withholding Tax (C)

Publication Date: January 01, 1987
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In January 1982, Senator Robert Dole successfully pushed through Congress a package of budget cuts and "revenue enhancements" that included a ten percent withholding tax on interest and dividends. This case examines Dole's methods and the successful campaign by the American Bankers' Association (ABA) to get the interest withholding provision repealed. Part A describes how Dole got the legislation approved, the composition and interests of the ABA, and the situation in which its leadership found itself in 1982. Part B describes the ABA's advertising and letter-writing campaign, which created millions of individual correspondences with members of Congress. Part C describes the legislative maneuvering and the final repeal of the withholding tax.

Learning Objective:
The case illustrates the role of interest groups in the federal legislative process. It raises questions of legitimacy about the methods used by both Dole and the ABA in the struggle over legislation. It requires an exploration of what students consider a legitimate grassroots movement, and how the public interest can be known. And it emphasizes the need to think strategically about legislation beyond the time of its enactment to ensure that it is ultimately implemented.

Other Details

Case Author:
Andrew Stone
Faculty Lead:
Nancy Altman-Lupu
Pages (incl. exhibits):
United States