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U.S. Travel Delivers Job Creation Proposals to Congress

February 2, 2010 By: George Dooley

Travel-related tax deductions, hiring of additional consular officers and creating a promotion program aimed at attracting more international travelers are among the recommendations of the U.S. Travel Association,  as part of its continued push to use travel as a vehicle to create jobs and stimulate the economy. Among the recommendations are a spousal travel tax deduction, a business meal tax deduction and a performance incentive travel tax deduction.

"Travel is vital to the nation's economy, ranking among the top 10 industries in 48 states and the District of Columbia in terms of employment," Roger Dow, U.S. Travel's president and CEO, wrote in a letter to Senate Majority Leader Harry Reid and Senator Max Baucus, chairman of the Senate Finance Committee.

Travel is directly responsible for 7.7 million American jobs, and another 10 million jobs are indirectly related to travel, making it one of the largest employment sectors in the country, U.S. Travel said. "It is critically important to take all steps possible to foster growth in the travel industry and realize travel's potential to improve the American economy," Dow added.

According to the U.S. Travel Association, the industry lost nearly 400,000 jobs the past two years, but current modest projected growth of two-to-three percent this year will create about 90,000 jobs.

The proposals are separated into immediate and medium-term impact on jobs.

Immediate Impact on Jobs

*    Spousal travel tax deduction
*    Business meal tax deduction
*    Performance incentive travel tax deduction

Medium-Term Impact on Jobs

*    Enact Travel Promotion Act
*     Hiring and placement of consular officers
*    Investments in highways and bridges to facilitate increased travel
*    Funding to modernize America's air traffic control system
*    Airport entry funding

"Allowing business travelers to take a tax deduction for the cost of their spouse's travel will encourage more business travel, improve the day-to-day lives of American families, and boost job creation in the hospitality and travel sectors," Dow wrote. Senator Lindsey Graham is sponsoring the spousal tax deduction through S. 261, as is U.S. Representative Neil Abercrombie in H.R. 562, both of which have significant private sector support.

Dow also urged Senate leaders to consider expanding the current tax code to allow an incentive program sponsor to deduct the cost of qualified incentive travel awards and exempt award winners from paying taxes on the resulting "income".

Dow cited new research by international economic consulting firm Oxford Economics that shows investing in incentive programs to reward and motivate employees can increase employee morale and provide a four to one return on investment for the company.

"The additional revenue and savings generated by incentive travel would spur new hiring by the employer and create demand for additional jobs within the travel industry," Dow noted.

Dow also urged final passage of the bipartisan Travel Promotion Act (S. 1023), which has passed the House and Senate last year and would create the first-ever promotion and communications program aimed at attracting international travelers as visitors to the U.S.

Oxford Economics found that a fee-funded promotion program of $200 million will attract 1.6 million new visitors each year, add $4 billion to the U.S. economy annually, $320 million per year in new federal tax revenues and create approximately 40,000 new U.S. jobs. The Congressional Budget Office reports that the bill will reduce the deficit by $425 million and increase revenues by $135 million over the next 10 years.

Other proposals made by Dow include adding 100 new consular officers in geographically large countries such as China, Brazil and India to help process visa applications. Dow wrote, "If the U.S. could gain an additional 5 percent of the Indian outbound travel market, it would drive more than $3.3 billion in additional export revenue and create 30,600 more American jobs in one year."

The letter to Reid and Baucus comes on the heals of proposals made by the U.S. Travel Association in advance of the President's jobs summit held in December. "I urge you to adopt these proposals in any forthcoming jobs package to create jobs, drive spending and provide the American economy with the rapid and meaningful boost it needs at the federal, state and local levels," Dow concluded.


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