The coronavirus pandemic has forced businesses around the world to shut down, including tourism. This has negatively
affected the economy of the United States so much that it shrank up to 4.8% in just the first three months of the year.
Although the Paycheck Protection Program and the CARES Act have offered temporary help to all Americans, the government is still working on other guidelines that can assist the industries that were deeply affected by the pandemic.
Boosting the economy
On May 18, President Donald Trump talked about the idea of a tax deduction for Americans during a round table discussion with restaurant executives and industry leaders. The said tax deduction could help re-stimulate the economy.
President Trump called it "Explore America Tax Credit" which is a credit that Americans can use for restaurant visits and domestic travel. However, no further detail about the tax credit has been announced since it was discussed last month.
The outline of the tax credit as outlined by Bambridge Accountants New York on Newswire, the "Explore America Tax Credit" will provide tax relief to Americans and it will be around $4,000 per household. This is to encourage Americans to go back to dining at restaurants and it can be their cash assistance for domestic travel.
This means that those who will put money back into the tourism and restaurant industry will be rewarded come tax season. The initial proposal also includes a tax credit of up to 50% of a household's spending on expenses including car rentals, airfares, restaurants, theme parks, and hotels. It would also apply to eligible expenses until 2021.
The U.S Travel Association said in a statement that the "Explore America Tax Credit" can help put the country's economy back to prosperity.
The association added that they are grateful that the President and Congress are concerned about the industry and are working into making sure that the businesses in the country can survive and that the people can get back to work.
It is still not clear if the tax credit idea has been proposed in the United States House of Representatives or the Senate. However, businesses around the country are hoping that the "Explore America Tax Credit" does happen.
Will Congress get on board?
Kevin Hassett, the White House economic advisor told the Wall Street Journal that the odds of a "Phase Four" stimulus package are very high. The travel industry lobby has pitched numerous policy proposals for inclusion in the next package.
The tax credit that the President mentioned can encourage domestic travel and can help boost businesses in the country. It is still difficult to know if Congress will be on board with the idea. Since the President mentioned the tax credit last month, the administration has been silent about it and had not provided further details. Congress has not introduced legislation about the tax credit.
According to Roger Dow, the CEO of the U.S. Travel Association, they are grateful that the President is hearing their plea and that they are hoping that there will be a national effort to get Americans to travel again domestically.
