Will Taxing Foreign Visitors Promote Tourism?
President Obama is taking a break today from promoting a more federalized health-care system to sign a bill creating a federalized tourist promotion campaign.
In a closed ceremony at the White House, the president signed the Travel Promotion Act. After gaining final passage by the Senate last week, the bill will raise an estimated $200 million a year by imposing a $10 tax on visitors to the United States from countries where they are not required to obtain a visa. The revenue will be used to create and fund a new agency, the Corporation for Travel Promotion, that would work with the U.S. tourism industry to promote the United States as a global travel destination.
I’m all for promoting tourism to the United States. Tourism is an important “service export” that generates more than $100 billion a year in earnings from foreign travelers to the United States. But a new federal agency and a new tax on travel are not the right way to drum up more tourism business.
First, just on principle, promoting a particular industry should be the business of that industry, not the business of government. Americans also export billions of dollars worth of farm goods, semiconductors, machinery, aircraft, pharmaceuticals, and chemicals, along with financial, education, insurance, and other services. None of those industries deserves their own tax-financed promotion board either. If the payoff from promotion is so huge, the industry should be willing to bear its cost without the aid of the government.
More practically, it goes against basic economic logic to promote tourism to the United States by imposing new costs on tourists. Granted, $10 is not a large amount, but the demand curve for tourism is downward sloping – as it is in every other market. A higher price will lead to less demand, not more. As a spokesman for the International Air Transport Association told ABC News:
It’s absolutely counterintuitive. To us, we’re saying we’d love to see more people visit the United States, but we’re going to charge you more for the privilege of entering the country. We are in favor of increased tourism and visitation… but let’s look at our priorities. We don’t think that videos and billboards are necessarily a priority. Instead, we should be focusing on how to make customs and immigration easier for people.
As I argued in a previous post, the U.S. government should be doing more to keep dangerous people off flights to the United States instead of making it even more difficult for perfectly harmless tourists and business travelers to get on those same flights.
Review of the Big REAL ID Hearing
The Senate Homeland Security and Governmental Affairs Committee held a hearing yesterday on the REAL ID Act and the REAL ID revival bill, known as PASS ID. I attended and want to share with you some highlights.
Good News!
Little good came from the hearing, as it was primarily focused on how to get the states and people to accept a national ID. But there is some good news.
First, Department of Homeland Security Secretary Janet Napolitano declared REAL ID dead (much as I did in my testimony two-plus years ago). “DOA” is how she referred to it.
She also said that no state will be in compliance with REAL ID by the current December 31, 2009 deadline. This is important because a lot of people think that states doing anything about the security of drivers’ licenses and ID cards are complying with REAL ID.
Another highlight was the commentary of Senator Roland Burris (D-IL). He is a beleaguered outsider to the Senate and evidently wasn’t coached on the talking points around REAL ID and PASS ID. So he flat out asked why we shouldn’t just have “a national ID.”
Senator Susan Collins’ (R-ME) nervous smile was particularly noticeable when Burris asked why the emperor had no clothes. No one was supposed to talk about national IDs at this hearing! But that’s what PASS ID is.
REAL ID and PASS ID are two versions of the same national ID system, and nobody is denying it. That’s good news because the effort to rebrand REAL ID through PASS ID has failed.
Making Airline Travel as Unpleasant as Possible
The Transportation Safety Administration long has made air travel as unpleasant as possible without obvious regard to the impact on safety. Thankfully, the TSA recently dropped the inane procedure of asking to see your boarding pass as you passed through the checkpoint — a few feet away from where you entered the security line, at which point you had shown both your boarding pass and ID.
However, there are proposals afoot in Congress to set new carry-on luggage restrictions, to be enforced by the TSA, even though they would do nothing to enhance security. An inch either way on the heighth or width of a bag wouldn’t help any terrorists intent on taking over an airplane. But the proposed restrictions would inconvenience travelers and allow the airlines to fob off on government what should be their own responsibility for setting luggage standards.
TSA also has restarted ad hoc inspections of boarding passengers. At least flights as well as passengers are targeted randomly. After 9/11 the TSA conducted secondary inspections for every flight. The process suggested that the initial inspections were unreliable, delayed passengers, and led experienced flyers to game the process. It was critical to try to hit the front of the line while the inspectors were busy bothering someone else. There was no full-proof system, but I learned that being first or second in line was particularly dangerous.
Finally TSA dropped the practice. And, as far as I am aware, no planes were hijacked or terrorist acts committed as a result. But TSA recently restarted the inspections, though on a random basis.
I had to remember my old lessons last week, when I ran into the routine on my return home from a trip during which I addressed students about liberty. Luckily I was able to get on board, rather than get stuck as TSA personnel pawed through bags already screened at the security check point.
There’s no fool-proof way to ensure security for air travel. Unfortunately, it’s a lot easier to inconvenience passengers while only looking like one is ensuring airline security.
Tightening the Noose Around the Right to Travel
Ask anyone who has experienced life in a country where freedom of movement is not recognized, and you’ll come away impressed with the importance of having the right to travel. That right takes another step back in the United States today.
Today the federal government takes over from airlines the process of running passengers against its terrorist watch lists. This means that when you fly, the Transportation Security Administration now requires airlines to give the government your full name, your itinerary, your date of birth, your gender, and an optional “redress number.”
Running names against watch lists does not secure against even modestly sophisticated attackers — 17 of 19 9/11 hijackers were “clean skin” terrorists, without histories of activity that would get them on watch lists. And in 2002, an MIT study (the “Carnival Booth“) showed how passenger profiling failed as a security measure. Attackers could “step right up” and test the system on dry runs to see if it singles them out. The same applies to watch listing.
Transferring responsibility for checking watch lists is a small step, but it brings into sharp focus that the government is now pre-screening Americans’ travel and travel plans.
There is no telling which direction this mission will creep over time. In the event of an attack on some other mode of travel — even a small or failed attack — expect the government to extend pre-approval for travel in that direction. The government will soon discover that it can run names of travelers past other lists — first dangerous wanted criminals, then wanted criminals, then “deadbeat dads,” and on down the line to people with unpaid parking tickets.
Limiting the TSA’s Use of “Strip Search Machines”
I wrote here in February about the push and pull over “strip search machines,” also known as “whole-body imaging” and “millimeter wave scanning.”
The question is joined: How do you maintain privacy with a technology that’s fundamentally intrusive? Maybe by using it less. This week, Rep. Jason Chaffetz (R-UT) introduced a bill to limit the use of whole-body imaging.
H.R. 2027, the Aircraft Passenger Whole-Body Imaging Limitations Act of 2009, would place several limits:
- Whole-body imaging could not be the sole or primary method of screening a passenger, and it could only be used as a follow-up to other methods like metal detection.
- Passengers would have the right to opt for a pat-down search instead of whole-body imaging.
- Passengers subject to whole-body imaging would have to be provided information about the technology and the images it generates, on privacy policies, and the right to have the pat-down search instead.
- Images of passengers generated by whole-body imaging technology could not be stored, transferred, shared, or copied in any form after the passenger has passed through the security system.
TSA Intimidates Political Activist Traveler
Thanks to ever-improving technology, we have a record of what can happen when Americans try to assert their rights against government officials.
The video is a bit ponderous, but when they play the tape of TSA agents interrogating a young political activist who wishes to exercise his right to remain silent, it’s riveting and offensive.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
