- The next coronavirus stimulus package, once Congress gets around to finally passing it, could include a tax credit designed to get Americans traveling again.
- Most people are avoiding planes and hotels right now over the fear of catching the coronavirus.
- This new tax credit would reward Americans with up to $4,000 per household for spending on things like car rentals, hotels, and restaurants.
The coronavirus pandemic has forced the US to confront the worst economic crisis it’s seen in generations, putting tens of millions of Americans out of work, wiping out demand for countless business around the country in almost every industry, and forcing the government to craft massive stimulus packages to keep the country afloat during this extraordinary period. As a testament to how truly unprecedented the times are, most Americans have already received a coronavirus stimulus check from the government totaling up to $1,200 for individuals and $2,400 (plus another $500 for each eligible child) for married couples.
Meanwhile, lawmakers have started the process of hashing out what additional stimulus measures might look like, with plenty of Americans having acknowledged that as beneficial as that first stimulus check was, things are bad enough that they already need another. One idea proposed is to target future stimulus money to the neediest Americans, while another idea that hasn’t been talked about enough is a proposed tax credit that the travel industry would no doubt welcome with open arms.
The idea, which President Trump floated back in mid-May during a roundtable discussion with business leaders, is called the Explore America tax credit, and it would provide a tax credit of up to $4,000 to households to do exactly what the name suggests: Americans could use that money for anything from domestic travel to even visiting restaurants.
As it’s been discussed informally already, the idea would be for the tax credit to pay back Americans up to 50% of what they spend on things like airfare, hotels, car rentals, and restaurants. It would apply to eligible expenses this year as well as in 2021, and it would max out at $4,000 per household. Two trade groups already like this idea enough to have put out the following statements:
From the US Travel Association, “An ‘Explore America’ tax credit and campaign will do wonders to put America back on the path to prosperity.” Likewise, from the Independent Restaurant Coalition, which also supports this idea: “We are grateful that President Trump and Congress are taking the concerns of our industry seriously and look forward to working together to ensure our businesses can survive this crisis and our employees can get back to work.”
As we’ve previously noted, the Trump administration has expressed support generally for more coronavirus-related stimulus, albeit in a more targeted and industry-specific way than previous measures. I’m certainly suffering from cabin fever myself and would love to start traveling again, and this idea seems like a decent way to promote more of that activity and help a battered industry recover in the process.