Second Stimulus Checks Vs. $4,000 Travel Tax Credit: Pros And Cons

Is a second stimulus check or $4,000 travel tax credit more likely?

The Trump administration appears open to both a second stimulus check and a $4,000 travel tax credit. However, there is a lower likelihood for a second stimulus check. Therefore, don’t expect a second stimulus check. Senate Republicans, including Senate Majority Leader Mitch McConnell (R-KY), don’t support a second stimulus check. There are two primary reasons: the relatively high cost and other legislative priorities to stimulate the economy. The Trump administration appears most focused on stimulating the economy through job growth. This includes a focus on manufacturing jobs, infrastructure spending, a payroll tax credit, a return to work bonus and other related incentives. A travel tax credit, if it’s included in the next stimulus, appears to tie more closely to this philosophy. Why? A travel tax credit could support the administration’s focus on direct spending in the economy and also has the potential to create more jobs in sectors of the economy that have been hit disproportionately due to Covid-19.

Pros

• Provides direct money to the American people
• Helps people provide for their family and pay their living expenses
• Encourages recipients to spend money to boost the economy

Cons

• The cost of a second stimulus check is high
• A second stimulus check may not stimulate the economy
• A second stimulus check doesn’t directly create new jobs

If there is a second stimulus check, there have been multiple proposals about the potential size. For example, House Democrats passed the Heroes Act, which is a $3 trillion stimulus bill. The Heroes Act includes a second stimulus check of up to $1,200 for each individual and $1,200 for each dependent (with a maximum of three dependents). Former presidential candidates Sen. Kamala Harris (D-CA) and Andrew Yang proposed that you get a $2,000 a month stimulus check. This monthly stimulus check builds on Yang’s proposal for universal basic income of $1,000 a month for life. Harris, Sen. Bernie Sanders (I-VT) and Sen. Ed Markey (D-MA) introduced the Monthly Economic Crisis Support Act in Congress, which would pay you a second stimulus check of $2,000 a month for each individual and $2,000 a month for each individual (up to a maximum of three dependents). Billionaire entrepreneur and Shark Tank star Mark Cuban proposed a $1,000 stimulus check every two weeks.

Pros

• Helps revive the travel, restaurant and tourism sectors of the economy
• Encourages recipients to spend money to boost the economy
• Creates demand for more jobs, which can reduce unemployment

Cons

• This would be a tax credit, not direct money
• Safety concerns surrounding Covid-19 and a second wave
• The cost of a travel tax credit could be high

What’s your thoughts?