Could American families make money by traveling during the COVID-19 pandemic?
In late May, the U.S. Travel Association proposed a series of policies that would stimulate the economy and benefit business owners and consumers in the wake of a stalled out HEROES Act, a lack of meaningful effort on the second wave of stimulus checks, and a bottoming out economy. Many of these measures include increasing borrowing limits for business owners and extending loan forgiveness until the end of 2020, but one initiative, in particular, has captured the eye of the president. That’s the Explore America Tax Credit.
The Explore America Tax Credit is a proposal that would give people and businesses an incentive to travel. While the details have not been ironed out — for various reasons — one iteration of the proposal included giving people a tax credit of up to 50% of spending on a trip, eligible to $8,000 per household. The expenses that would be covered under such a proposal include plane tickets, rental cars, gas, hotels, theme parks, food, etc. The U.S. Travel Association’s most recent suggestion is far less generous — offering $4,000 per household. Qualified travel expenses would be any expense over $50, per their plan, and would include any travel between the date of the tax credit being enacted until the end of 2021.
But how likely is it that the plan will actually be enacted? According to USA Today, despite it being brought up by the president and oft-discussed, the provision hasn’t been included in any stimulus bills or packages that are currently being discussed in the House or Senate, and there are no singular bills that include the Explore America Tax Credit, either.
Some analysts suggest that such a bill would also be unlikely to pass because of the economic reality of Americans: with dozens of millions of Americans out of work, travel is neither an option nor a priority for regular citizens or lawmakers. An out-of-work parent won’t take advantage of a tax credit, which would take months to be returned to them, to spend money on leisure travel in the midst of a pandemic and economic downfall.
The nature of the tax credit also means that only those who can afford to take vacations during this time will take advantage of the credit — and that it won’t help people who need financial assistance the most. Given that tax credits take quite some time to manifest in people’s bank accounts, only those who can afford to shell out the extra cash right now would be able to take advantage of a benefit that would take months to materialize.
Whether or not the proposal will ever make it to the House or Senate floor is still very much an open question. But even if it did, it’s hard to imagine many politicians would support a benefit that would largely benefit the wealthy — and not those who need the help the most right now.