Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Parking

Congress Expected to Level Tax Benefit for Transit and Car Commuters

A federal policy that has encouraged Americans to drive to work instead of taking the bus or the train won't tilt the playing field toward car commuters so much.

Those who take the bus or train to work will soon enjoy the same tax benefits as those who drive. Photo: Wikipedia
People who take the bus or train to work should soon be eligible for the same tax benefits as people who drive. Photo: Wikipedia
Those who take the bus or train to work will soon enjoy the same tax benefits as those who drive. Photo: Wikipedia

A bill that extends provisions of the tax code will permanently set the maximum transit commuter tax benefit at the same level car commuters get for parking expenses. Both classes of commuters can now pay for those costs with up to $255 in pre-tax income per month. The tax deal is expected to clear Congress this week, reports Forbes.

Currently, the monthly pre-tax expense for transit riders is capped at $130, while the cap for parking is set at $250. The mismatch primarily works against commuter rail and express bus services, which can easily cost more than $130 per month.

In recent years, lawmakers went back and forth between temporarily leveling the playing field and stiffing transit riders.

Jason Pavluchuk of the Association for Commuter Transportation applauded the measure, which would take effect in 2016. "This provision will eliminate the financial incentive to drive alone and will increase transit," he said. "Further, this will help both transit riders as well as drivers who will benefit from less congested roads."

While commuter tax benefit parity is an improvement, eliminating the benefit entirely would be better.

A report released last year by TransitCenter and the Frontier Group pointed out that commuter tax benefits amount to a gigantic transfer from low earners to high earners, who are best positioned to take advantage of them. Also, the maximum benefit may now be level for individual commuters, but in the aggregate the vast majority of these tax incentives will continue to go toward driving, an enormous subsidy that makes rush hour traffic congestion worse.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Friday’s Headlines Are Still Unsafe

Traffic deaths are declining for those ensconced in thousands of pounds of steel. For the rest of us, not so much.

April 12, 2024

Measure HLA Is Now Officially Law for L.A. City

Check the city maps to find what bus, bike, and walk improvements are coming to streets in your neighborhood.

April 12, 2024

Talking Headways Podcast: Women’s Transportation Seminar

Sara Stickler of WTS International on women’s expertise in transportation and opportunities for mentorship, leadership and education.

April 11, 2024

Don’t Call Thursday’s Headlines a Comeback

Transit ridership isn't all the way back yet, but it continues to climb after collapsing during COVID. Unfortunately, the financial effects of the pandemic on transit agencies still linger.

April 11, 2024

Long-Awaited Report Reveals Widespread Parking Crime by NYPD

The overdue report confirms years of Streetsblog reporting on placard abuse, illegal parking and enforcement failures by the police under two mayors.

April 11, 2024
See all posts