How stir crazy are you after months of COVID-19 quarantine, either self- or government-imposed? For millions of folks, the answer is pretty freakin' fed up with being stuck at home.
I feel your closed-in pain. The hubby and I aren't big socializers, but even we are reaching our limit. This morning we went for a drive beyond just our local grocery and drug stores.
Our face masks were in the glove box, just in case we stopped somewhere where people were gathered. We didn't need them. Oh, folks were congregating. But we didn't stop. Not yet.
Call us snowflakes or cowards or whatever. Right now, we don't care. We're definitely believers of that old saying about words being less dangerous than sticks and stones and, right now, the coronavirus.
And that thinking is a problem for any quick and widespread economic recovery. Until more people start to venture out, things aren't, as the catch-phrase goes, get back to normal, or what counts as normal in this time of coronavirus.
That's why some folks, including the current occupant of the Oval Office, have floated yet more tax breaks to help re-stimulate the economy. The tax benefits would encourage both the business community and all us regular Joe and Jane Taxpayers to get out and spend.
Reverting to old business entertainment tax rules: Donald J. Trump broached the idea of restoring the full deductibility of business meal expenses just days after he signed the Coronavirus Aid, Relief and Economic Security (CARES) Act into law in late March.
That $2 trillion package provided some business and individual pandemic tax breaks, into law in late March. But Trump thinks that Capitol Hill also should have added to the tax break menu by making business meals more appealing, like they were back in the early 1980s.
Businessmen and women were allowed a 100 percent write-off of a work-related meal until the enactment of the historic Tax Reform Act of 1986. This change, dubbed the 3-martini business lunch rule, cut the business meal deduction to 80 percent. During those days of Gucci Gulch lobbyists, the move was designed to cut down on taxpayers subsidizing extravagant business meals.
Congress further cut the deductible business meals amount to 50 percent in 1993. And the Tax Cuts and Jobs Act (TCJA) of 2017 did away with the entertainment component deduction altogether.
Trump mentioned going back to less stringent taxation of such business activities after he signed the Coronavirus Aid, Relief and Economic Security (CARES) Act, which provided some business and individual pandemic tax breaks, into law in late March.
Congress must pass the old, and very strongly proven, deductibility by businesses on restaurants and entertainment. This will bring restaurants, and everything related, back - and stronger than ever. Move quickly, they will all be saved!— Donald J. Trump (@realDonaldTrump) April 1, 2020
Traveler tax break, too: Trump, however, didn't stop there, no doubt influenced by his family's hospitality-focused businesses.
Last month during a meeting with restaurant executives and industry leaders, he suggested creation of a tax credit that could be claimed by those who get out of their houses for certain recreational reasons.
"Create an 'Explore America' — that's 'Explore,' right? Explore America tax credit that Americans can use for domestic travel, including visits to restaurants. That's a big deal." Trump said in opening remarks to the restaurateurs.
So far, there's been on additional White House word on the Explore America tax credit. Neither has there been any proposed legislation by either House or Senate members of the GOP.
However, that hasn't stopped speculation about what such a tax break might look like. One such hypothetical is offered by Bambridge Accountants, an accounting firm with offices in New York and London, in a statement released via Newswire.
"While the Explore America Tax Credit is still being reviewed by Congress and President Trump's administration, the initial proposal is a tax credit of up to 50 percent of a household’s spending on expenses including airfares, car rentals, hotels, theme parks and restaurants," said the accounting firm.
The tax credit would be up to $4,000 per household and it would apply for eligible expenses in 2020 and 2021, noted the Bambridge release.
So basically, you'd get a bit of a tax break for helping support not only your local eateries, but also for taking trips.
Even better, Uncle Sam's help for your dining and travel experiences is a tax credit, which would provide a dollar-for-dollar reduction of any tax you owe.
Not surprisingly, the travel and dining industries are on board.
"An 'Explore America' tax credit and campaign will do wonders to put America back on the path to prosperity," said the U.S. Travel Association in a statement.
The Independent Restaurant Coalition shares that sentiment, announcing, "We are grateful that President Trump and Congress are taking the concerns of our industry seriously and look forward to working together to ensure our businesses can survive this crisis and our employees can get back to work."
Part of upcoming COVID-19 relief? It's possible that this could be part of the next COVID-19 relief package that the Trump Administration and Senate Republicans are working on in answer to the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act that the House passed May 15.
But I'm not sure how much of an incentive it really would be.
First, you wouldn't get any tax benefit until you filed your return the following year.
Second, folks who already are cash strapped aren't going to spend on something most folks see as a luxury, not a necessity, like paying utilities or buying groceries to feed your family at home.
Finally, about being at home. Despite the folks we saw out and about, I'm not sure there's a critical mass yet that is comfortable enough dining out, even with precautions. Rather, the hubby and I and lots of others are at the level of that concerned corgi shown below.
Me watching people return to dine in restaurants pic.twitter.com/QibnYTG0vW— I SEE HAWKS IN L.A. (@iseehawksinla) June 13, 2020
But I'll keep my eye on the continuing coronavirus relief plans and let you know if the Explore America tax credit is part of it. If so, it wouldn't hurt to hang onto to receipts when you finally do decide you're ready to eat at your favorite restaurant.
You also might find these items of interest:
- Virginia Beach dishes out coronavirus meals-tax holiday
- How Prohibition made us more reliant on the income tax
- Deducting business meals & other expenses on Schedule C