The Senate has begun consideration of the Travel Promotion Act of 2009 (S.1023) — a bill which, on its face, would seem to have a good purpose: to provide information to foreign travelers and encourage travel and tourism to the United States. Who could possibly be against that idea?

Nobody it seems – the bill has 47 sponsors in the Senate and looks like one of those bills that will eventually pass by voice vote.

It shouldn’t.

In its current form, the proposed law ought to be rejected. Not because the objects of the law are bad; they aren’t. But the way that the law proposes to achieve them will hurt every American who travels to Europe.

The bill creates a new non-profit corporation for the promotion of travel. So far, so good. It’s useful to have a forum in which the American travel industry bands together and promotes its product overseas. We might ask why the travel industry should get that sort of benefit from the government, but at a time when the government is practically in the business of selling American cars direct to consumers, that just quibble. And if that were all this was – a non-profit funded by the industry for its own benefit — nobody would be writing blog posts about it.

The problem is that the non-profit corporation will not be exclusively self-funded. Instead it will partially rely on a new tax.

Now fortunately (or so you would think), it isn’t a tax on Americans. It’s a tax on the foreigners who come to the United States using something called the Visa Waiver Program (VWP). The VWP allows foreigners to come here without getting a visa. Instead, all they have to do is fill out an on-line application through a system known as the Electronic System for Travel Authorization (or ESTA). Under the law if they complete an ESTA application and no problems are found they may travel to the United States with nothing more than a passport and a plane ticket – just like Americans today can travel to Europe for vacation. No visa needed. No long lines to wait in at the embassy.

And …. NO FEE. Today ESTA is free to VWP participants. S.1023 will change that and charge all ESTA users $10 per authorization. The fee won’t go to defray ESTA expenses, but rather it will go to fund the non-profit travel promotion corporation.

And what’s so bad about that? If it ended there, nothing. But it won’t end there. The European Union has said that if the United States charges a fee for ESTA, then in its view ESTA will become, in effect, just like a visa program — a fee, after all, is one of the ways you actually recognize a visa program.

And if ESTA becomes a visa program, the EU has threatened to impose a visa program on Americans travelling to Europe. And it won’t be the “visa-lite” program that ESTA is. Oh no. The EU doesn’t have ESTA yet, so the visa program they are thinking of is the old-fashioned one – fees, long lines, days of delay, the whole nine yards.

So that’s the question – in order to help the US travel industry promote American travel, should we use the federal government to tax Europeans traveling to America? Does it matter if in doing so we will create a sore point with our trans-Atlantic partners? Does it matter if in doing so the end result will be that Americans traveling to Europe will have to go to the time and inconvenience of getting a European visa?

The right answer, of course, is not to kill the bill – but rather to fix it. As a self-funded institution, the corporation is just fine. It just shouldn’t meet its funding needs through the ESTA program tax, which is likely to cause problems for the travelling American public.

Paul Rosenzweig, the founder of Red Branch Consulting, PLLC, formerly served as Deputy Assistant Secretary for Policy and Acting Assistant Secretary for International Affairs at the Department of Homeland Security.

  • I’m fascinated by the diverse range of views and opinions. Who’s your “go to” guy?

  • Great blog. Do you know of any relevant forums or discussion groups?

  • very relevant post, keeping the awareness high…