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July 24, 2013

Congress threatens Afghanistan over U.S. exit taxes

Bradley Klapper
Associated Press

Lawmakers threatened Afghanistan July 23 with severe cuts in foreign aid if President Hamid Karzai’s government institutes an exit tax on American military equipment, food supplies and other goods as the United States pulls most of its troops and much of its property out of the country over the next 18 months.

I have seen some stupid things from that government,î said Sen. Patrick Leahy, who co-sponsored the amendment. ìI have seen some things that make you wonder what universe they live in. But this one just went beyond the pale.

Republican Sen. Lindsey Graham agreed, calling talk of an exit tax on U.S. property ìridiculousî after a dozen years of American-led stabilization efforts in Afghanistan.

Their threat: To withhold $5 in foreign aid to Afghanistan for every $1 in fees imposed on the United States for repatriating any property.

The levies were described in a June 28 letter to lawmakers identifying almost $1 billion in business taxes and penalties imposed by the Afghan government on contractors supporting U.S. operations. The U.S. special investigator for Afghanistan warned of hundreds of millions of dollars in additional future costs if Congress doesn’t act.

Since 2002, Congress has spent more than $90 billion on humanitarian and reconstruction programs in Afghanistan. That doesn’t include hundreds of billions of dollars more in military costs.

The Afghanistan amendment was attached to the Senate’s 2014 foreign operations bill, which passed an appropriations subcommittee by voice vote Tuesday. It will go to a full Senate vote in the coming weeks.
The bill slashes the State Department’s diplomacy and aid budget by 5 percent from last year, but is far less severe than the 20 percent reduction approved by a House panel last week.

Like the House, the Senate provides full funding for embassy security to guard against any repeat of last year’s deadly attack in Benghazi, Libya.

However, the Senate maintains payments for several U.N. agencies that the House wants to cut funding for completely. It provides stronger support for global climate change programs, international financial institutions, development efforts and disaster relief.

The Senate’s bill proposes spending of $50.6 billion.




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