Second stimulus check: what is the vacation credit & how long would it last?
The Trump administration is rumored to be considering an 'Explore America' tax credit aimed at boosting domestic tourism in the United States.
While Democrats favor a $3tn coronavirus relief bill and Republicans, led by Senate Majority Leader Mitch McConnell, push for a $1tn limit on any such legislation, United States President Donald Trump is said to be eyeing a package worth an amount somewhere in the middle, a White House trade adviser says.
Trump wants to spend "at least $2tn" on next stimulus package
Speaking to CNN this weekend, Peter Navarro said Trump is aiming to spend "at least $2tn" on stimulus measures whose chief focus would be on manufacturing. “The only way to fully rebuild the economy […] is to significantly expand and strengthen our manufacturing base," Navarro said. "Put simply, we need to create more manufacturing jobs.”
Trump’s administration is also open to giving Americans a second stimulus check as part of the bill, Treasury Secretary Steve Mnuchin said last Wednesday, telling a Senate hearing: "I think we're going to seriously look at whether we want to do more direct money to stimulate the economy.”
'Explore America': $4,000 tourism tax credit
Meanwhile, the next Covid-19 relief package could also include a tax credit that would seek to boost domestic tourism by rewarding people for taking a vacation in the US. Known as ‘Explore America’, Forbes reports, the initiative would cover as much as 50% of a household’s travel expenses, up to a maximum of $4,000, until the end of 2021.
A vacation tax credit would apply to any expense over $50 on things such as "meals, lodging, recreation, transportation, amusement or entertainment", the US Travel Association explained in a statement in late May.
Tourism industry sheds jobs as Covid-19 hits hard
The tourism industry has been particularly badly affected by the financial crisis caused by the coronavirus pandemic; indeed, Forbes notes that it accounted for almost 40% of the 20.7 million jobs lost in the United States in April.
What is a tax credit?
A tax credit is a sum of money that taxpayers can subtract from the amount of tax they owe a country's inland revenue. Governments use tax credits to incentivise certain economic activities, which commonly include things like paying for child care and continuing education, or saving towards a retirement fund.
Among the credits available to people in the US, for example, are the Child and Dependent Care Credit, the Retirement Savings Contribution Credit and the Lifetime Learning Credit.
Further info on IRS tax credits:
Live coverage of the coronavirus pandemic
At the time of writing, there had been 2,114,180 coronavirus cases in the United States, leading to 116,130 deaths. You can keep up with the latest US developments in the Covid-19 crisis by following our America-focused live feed.
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