Phase four stimulus package could include a tax credit for domestic travel
The Trump administration is looking into ways to help the travel industry recover
White House trade adviser Peter Navarro says while Speaker of the House Nancy Pelosi, D-Calif. is pushing for a $3 trillion stimulus program and Sen. Mitch McConnell, R-Ky., is campaigning for a $1 trillion version, President Trump would prefer one that costs about $2 trillion that focuses on bringing back America's manufacturing jobs.
The White House is considering a travel tax credit as lawmakers debate what should be included in a potential phase four stimulus package.
The travel industry took a severe hit as social distancing guidelines and stay-at-home measures prevented many people across the globe from flying or taking trips throughout the pandemic.
During a press briefing at the White House last month, President Trump mentioned creating an “Explore America” tax credit that Americans would be able to use for domestic travel and expenses, like meals at restaurants.
Senior White House adviser Kevin Hassett has said the administration has been laser-focused on policies that will help the travel industry rebound.
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U.S. Travel Association President and CEO Roger Dow said incenting individuals to travel would be an effective way to stimulate the economy.
“An ‘Explore America’ tax credit and the campaign will do wonders to put America back on the path to prosperity,” Dow said in a statement in May.
The U.S. Travel Association has said that the credit should include expenses over $50 incurred while traveling within the United States, including meals, lodging, recreation, transportation, amusement or entertainment, business meetings or events and gasoline.
It has also been reported that the proposed credit could be valued at as much as $4,000 per household.
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Hassett has said that a phase four bill is “very, very likely” and that the policies included will be conditional on how the U.S. economy is performing. In May, for example, the United States added an astounding 2.5 million nonfarm payroll positions.
However, Senate Republicans aren’t too eager to move quickly on new legislation in the immediate future. Majority Leader Mitch McConnell, R-Ky., has said lawmakers need to take time to assess what worked, and what didn’t, from previous legislation.
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McConnell did lay out some groundwork for what the legislation would not look like, saying it wouldn’t be a $3 trillion “left-wing wish list,” referring to the HEROES Act, which was passed by the Democratic-controlled House last month. Instead, McConnell said, it would focus on other policies to get the “economy growing again.”
The Senate majority leader also said he and the Trump administration is not in favor of including an extension of the $600 unemployment benefit expansion, which he said has deterred workers from returning to their jobs.
Some policies that the administration is considering include a payroll tax cut, a reduction in the capital gains tax rate, an expansion of full, immediate expensing, protections for businesses from coronavirus-related liabilities and a return of the full deduction for business meals and entertainment.