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A new GOP bill would give each taxpayer $4,000 to take a vacation anywhere in the US through the end of 2021

Jun 23, 2020, 23:32 IST
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  • A new bill from GOP senator Martha McSally would encourage people to travel around the US by effectively paying them $4,000.
  • The refundable tax credit could be applied through the end of 2021, and the trip must be 50 miles beyond a person's "principal residence."
  • But experts say low-income people would be left out of the plan since they're not required to file taxes.
  • Others said it may not be a good idea to encourage travel during a pandemic.
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A new Republican bill would give each American a $4,000 to take a vacation anywhere in the US through the end of next year.

Sen. Martha McSally unveiled the proposal on Monday, called the American Tax Rebate and Incentive Program Act, or the American TRIP Act. It would give each person a tax credit, meaning they would have to apply to write off up to $4,000 in travel-related expenses in tax forms.

That threshold would be doubled to $8,000 for couples and add $500 per child for all travel within the US to cover food, drinks, lodging, live entertainment as well as transportation like airfare or car rentals.

It would apply to trips taken between December 31, 2019, and January 1, 2022, meaning people could write off a vacation taken earlier this year. The tax credit would apply only to journeys that are 50 miles beyond a taxpayer's "principal residence."

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'The tourism and hospitality industries were among the hardest hit sectors across the country and their revival is critical to our economic recovery," the Arizona senator said in a press release, adding the state shed billions in travel-related revenue as a result of the coronavirus pandemic.

"My legislation will help boost domestic travel and jumpstart the comeback of our hotels, entertainment sectors, local tourism agencies, and the thousands of businesses that make Arizona one of the best places in the world to visit," she said.

She added: "It will also encourage Americans to safely get out of their homes and discover or rediscover Arizona along with the rest of the amazing destinations our country has to offer after a difficult several months stuck inside."

Critics, however, were quick to point out a significant portion of the public would be left out from the plan. Michael Linden, a fellow at the Roosevelt Institute, a progressive think-tank, said in a tweet that since the tax credit is refundable, low-income people not required to file taxes do not qualify for the money.

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Other experts questioned the wisdom of encouraging domestic travel during a once-in-a-century pandemic, which could spread the coronavirus. Cases are on the upswing in Arizona, a state that started easing its economic shutdown last month, according to The New York Times.

The plan from McSally mirrors one pushed by the US Travel Association to encourage people to travel around the US. Back in May, President Donald Trump also floated the idea of the "Explore America" tax credit during a roundtable with restaurant executives, USA Today reported, and the administration discussed pushing for it in the next economic relief bill set to be debated next month.

McSally, who served in the Air Force, is currently locked in a close Senate race with Democratic challenger Mark Kelly, a Navy veteran. A collection of polling averages from Real Clear Politics shows Kelly with a solid lead, 49% to 39%.

Read more: Dennis Lynch and Kristian Heugh run the best large-company stock funds of the last 10 years. The legendary investors break down the 5 principles that guide their quest for long-term growth.

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