If You Ride the Subway to Work You're About to Get Screwed

[Turbo19]

^{If You Ride the Subway to Work You're About to Get Screwed}

The federal commuter tax benefit is an obscure subsidy most Americans have likely never even heard of. But it's a simple illustration of the many subtle ways that official policy in the U.S. incentivizes private car travel over mass transit.

The benefit allows employees to devote a pre-tax chunk of their income to commuting costs, like parking garage fees or mass transit passes. Traditionally, though, the benefit has been nearly twice as generous for drivers as transit riders. In 2008, for example, transit riders were allowed to set aside $115 a month; car drivers (and their employers) could forgo paying taxes on up to $220 in income each month.

The 2009 federal stimulus package finally equalized the two benefits at the higher rate. But transit advocates have continued to fight over the benefit precisely because the higher transit subsidy keeps expiring – as it is set to do again on January 1. Come Wednesday, if you ride the subway or bus to work every day, your benefit will drop from $245 to $130 a month. If you drive to work, your benefit will actually inch up from $245 to $250.

The difference has practical implications beyond the principle involved here: Local agencies like the Washington Metropolitan Transportation Authority have suggested that ridership (and revenue) drops when this subsidy does. And commuters will be particularly affected in cities like New York, Chicago, Boston, and Miami, where a large share of workers get to work every day by transit.

 

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[BM5 via Woodhaven]

This country is gonna fall apart with the damnation of public transit, among other things. I don't want to be alive when that happens, but looks like it's starting already, in bits and pieces.

[Missabassie]

Yup. Our nation is goin to hell in a hand basket...

 

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[realizm]

Enter the retarded world of American politics.... Many cuts in the federal budget has been implemented into the budget before the winter recess began because of the continued infighting within the US House of Representatives over the rising national debt and the disagreements over the Affordable Care Act. Many tax subsidies and ultimately benefits that contributes to the quality of human life are being phased out or expiring (or has already expired) because of the ongoing political stalemate. Apparently the smoke has not cleared yet from the political shutdown. 

 

President Obama Barack had made executive orders to make many critical issues the first order of business when the congressmen return early next year so this may not be final. 

[AndrewJC]

^{If You Ride the Subway to Work You're About to Get Screwed}

The federal commuter tax benefit is an obscure subsidy most Americans have likely never even heard of. But it's a simple illustration of the many subtle ways that official policy in the U.S. incentivizes private car travel over mass transit.

 

The benefit allows employees to devote a pre-tax chunk of their income to commuting costs, like parking garage fees or mass transit passes. Traditionally, though, the benefit has been nearly twice as generous for drivers as transit riders. In 2008, for example, transit riders were allowed to set aside $115 a month; car drivers (and their employers) could forgo paying taxes on up to $220 in income each month.

 

The 2009 federal stimulus package finally equalized the two benefits at the higher rate. But transit advocates have continued to fight over the benefit precisely because the higher transit subsidy keeps expiring – as it is set to do again on January 1. Come Wednesday, if you ride the subway or bus to work every day, your benefit will drop from $245 to $130 a month. If you drive to work, your benefit will actually inch up from $245 to $250.

 

The difference has practical implications beyond the principle involved here: Local agencies like the Washington Metropolitan Transportation Authority have suggested that ridership (and revenue) drops when this subsidy does. And commuters will be particularly affected in cities like New York, Chicago, Boston, and Miami, where a large share of workers get to work every day by transit.

 

Read More: Source

 

This is a big deal for commuter rail riders and for express bus riders. It isn't such a big deal for those of us who mostly get around by subway and local bus. If I contribute the max of $130 each month, I have $18 left over after my 30-day MetroCard for other incidental rides.

 

As for the parking benefit, the point is to promote employment in large cities, where there are often charges for parking, over suburban areas, where there usually are not.

 

Personally, I wish we'd do away with these silly subsidies and just price driving and parking properly.

[peacemak3r]

Weekdays, I take public transportation. Weekends, I drive to work.

 

I guess this doesn't really affect me. Especially like AndrewJC points out, it's still $130, and that's still enough for the monthly metrocard. Not bothered by it for now.

[Roadcruiser1]

No taxation without representation! Our current Government works for lobbyists, and corporations so we have a right to fight back.........

[bobtehpanda]

No taxation without representation! Our current Government works for lobbyists, and corporations so we have a right to fight back.........

 

Most of America doesn't take transit, so on this note we are being fairly represented.

[Turbo19]

Personally though the entire premise is ludicrous. All politics aside this narrows down to the views that the consensus views public transit as second to private vehicle ownership, and as such these tax deductions given reflect that. There really aren't much other motives for not making the deduction equal across all modes other than to reinforce that stereotype.

[Missabassie]

America - Life. Liberty. and Car.

 

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[Interested Rider]

If I have one complaint, it is that this was a great deal for anyone that rides mass transit but many transit riders seem to pass on it even though it has enormous advantages for the riding public. When I was working, I signed up for the program and I think out of 400 employees, I was 1 of maybe 3 that took advantage of this benefit.

 

The advantage is greater for employees that take express buses and commuter rail as compared with someone who takes one bus and the subway or one bus (subway) to work every day. This is better for those that are higher income as it seems that those are the people that would benefit the most from this tax benefit.

 

Americans need their cars, no questions about it and no matter what we say or do to promote public transit, it will always be looked upon in a negative way. As far as Congress is concerned,,the transit riding public may provide the votes for re-election but do not provide them with what they really want, money which the highway lobby can provide plenty at all times.