The US economy is again beginning to show some signs of life. The employment rates are rising, and businesses across the country are beginning to re-open, but unfortunately, the fight against COVID-19 is not yet completed, reminds MoneyTalksNews.
However, the pandemic coronavirus called one of the most severe economic downturns since the great depression. Regardless of what positive results can already be seen at the initial stage of recovery, experts say there is still a long way to go.
The legislature is considering additional forms of assistance Americans for General stimulation of the economy. One of the proposals — a tax credit “Explore America.”
What is this loan and how it will work
Tax credit “Explore America” was mentioned in the comments of the President of Donald trump at the round table leaders of the restaurant industry in may and received the approval of the Independent restaurant coalition and the Association of travel US.
This proposal would allow the Americans to get a tax deduction up to $4,000 for travel within the country, which in turn, could help accelerate the recovery of the tourism industry in the United States.
Tax incentives allow individuals to claim the credit for up to 50% of their costs in U.S. airlines, companies, car rental, theme parks, hotels and restaurants in 2020 and 2021.
However, there are still many details that remain to be clarified.
If approved, the incentive plan journeys
The purpose of the bill “Explore America” will encourage consumers to support restaurants, airlines and hotels in USA — all enterprises which due COVID-19 have been particularly hard hit.
According to the Us travel Association, due to a pandemic crisis, people will spend 40% less in the tourism industry of the United States. Given these staggering data, it is not surprising that tourism boards welcomed the offer.
“The travel supported jobs for 1 out of every 10 Americans before the pandemic, and measures to encourage travel not just add people appreciation for the fact that we live in this great country, but will efficiently and effectively assist in the restoration of jobs in every corner of the country”, — stated in the press release of 19 may, published by the Association of travel US.
Will there be a tax credit to motivate people to travel
Although this solution is likely to provide much needed assistance to the tourism workers, the question remains: will the tax credit is sufficient to motivate people to travel given current risks to health and safety?
“This is too aloof to offer, says Francine Lipman, a law Professor at the University of Nevada in Las Vegas and a former accountant. — This will affect people who are still going to spend the money, so will not reach the goal (stimulus)”.
“If someone does not travel for fear of Contracting, I can’t imagine that the tax credit will eliminate this fear, says kirk Kinder, a financial Director and President of Picket Fence Financial in palm Harbor, Florida. — I also think that it is not possible to motivate those who are not traveling because of the financial consequences (loss of job, reduction of hours, and so on), because they will have to submit this amount to the tax refund only at the time of filing in 2021”.
On the contrary, Morris Armstrong, a licensed registered agent (EA), believes that innovation would provide a direct contribution of money into the economy.
“People who were not affected financially, received a bailout, and many received unemployment benefits in excess of their normal salary. These payments may be in banks or in the markets, not the economy, says Armstrong. The idea of a grant related to travel, ensures that the money will be spent to receive any benefit. Is a transfer of money from the consumer to the seller, whether airline, car rental, hotel or restaurant. In my opinion, it is a viable and differs little from the energy of the loan. You reward consumers for actions in the interests of economy.”
However, whether this is enough to help Americans in a troubled financial situation, or will be useful mainly for those who’d still go for the ride? Here is the answer of the expert.
“If you are not working or are worried to lose a job along with a possible second wave COVID-19 in the late fall and winter, you are just not going to travel, says David Evangelista, accountant, specializing in taxes and accounting in new York. Credit will be implemented only after filing a tax return in 2021 or 2022.”
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