The current trump administration is considering a travel credit of up to $4,000. The credit would work as follows:
- Credit is 50% of travel expenses up to $4,000 per household
- Credit applies to travel expenses when at least 50 miles away from home and applies to items such as airfare, hotels, rental cars, restaurant dining and events
- Credit would be available through the end of 2021
This idea was first brought up during a roundtable with restaurant executives sometime in May. We are hearing about it again as the U.S. Travel Association is lobbying both Congress and the Trump administration. Obviously most people would love to receive a 50% credit on travel, unfortunately at the end of the day it’s tax payers that will be funding this credit.
I personally think this is a terrible idea and that this money could be better spent elsewhere. If the government were going to do this, I would have preferred them doing it before giving travel companies billions in bailout money.
Hat tip to VFTW
Terrible idea but I’ll be glad to trade credit cards with my Dad in Florida for our outside dining expenditures to take advantage of this
But, son.. you’d be violating that card’s terms of service..
I am very much against this idea both from tax policy and virus containment. That said, if passed, I will try to utilize it to the maximum.
Ah, I see you’re a man of culture as well.
Is it a refundable or non refundable credit?
https://www.motherjones.com/politics/2020/06/donald-trump-loans-deutsche-bank/
While I generally don’t like the concept of Federal government handouts, at this point in time it becomes difficult to call them “taxpayer funded.”
The Federal Reserve Bank is printing Trillions of dollars out of thin air. While this behavior will almost certainly negatively affect taxpayers (and everyone else in the US) at some future point, there is little to no relationship between tax dollars collected vs amount which is to be spent.
I don’t like this, but that’s how it is today.
These types of subsidies help producers more than consumers. Remember when the EV tax credit expired, Tesla had to lower their prices by several thousand. So in effect, the subsidy inflated prices of Tesla vehicles for years and the consumer had little net benefit from the subsidy. This travel credit will be same — it will inflate travel prices by the size of the subsidy
Well said mate
But it also helped make it more affordable vs existing cars as the tooling and technology was rolled out and incentivized purchases/conversion. Why do we have mortgage deductions etc?
I do agree that it will then cause an increase in demand which companies would also raise prices to precovid19 or more.
It sounds like an unenforceable mess on both sides, let’s do it!
PS I think of it as the same way that credit cards and reward programs reorganized things and made it more difficult to not lose those extra %s – you are not gaining anything that you have not already lost – the “free market” can do it to us too, not just the government.
This is purely a luxury tax credit for the wealthy, how many working class pay $8000 or more to travel in a year? perhaps it will benefit those living in a hotel week by week 50+ miles from home
Technically it does benefit consumers. Electric cars are a relatively new technology. Any new technology comes at a cost that over time, through R&D and innovation, will almost always go down. It helps to boost sales, thereby accruing capital to help fund further research. The solar panels I purchased in 2011 are in today’s market outdated and much cheaper, even with reduced tax credits.
I’d agree this will create some artificial price inflation, but almost certainly not in direct proportion to the subsidy. The travel market is immense with lots of competition.
The EV market, particularly when its subsidies were running, was the opposite.
Onwards and upwards. But I thought it would be a tax deduction, not a straight-up rebate. I wonder how many new people IRS will have to hire to check even a 0.1% of such claims.
The 50 miles sounds impossible and so is the classification of travel vs business etc.
I am not sure this one is so much “fake news”, because some of European countries have been considering it. Also, given that the last EU stimulus bill is making Euro stronger and knowing how much the market swings influence Trump, this travel credit could be up for a vote, at least.
Wouldn’t $500 a night Motel 6s be happening because Motel 6 will know half of expenses will be covered by free traveller money?
What??? The economy doesn’t exist in a vacuum and laws have unintended consequences?! (sarcasm)
Except motel6 will still have to compete with all other hotels to land a booking in the first place…
Double dip travel credits from credit cards with this, LOL.
As a taxpayer and as someone who would benefit greatly from this, I still agree this is a terrible idea and money could indeed be used on more useful areas.