Despite Increased Subsidy for Transit Commuting, Traffic’s Still Getting Worse

fortune -excerpt

What looked like a win for both transit and traffic won’t do much to help either.

What looked like a win for both transit and traffic won’t do much to help either.

In a new analysis, the transportation research group TransitCenter has concluded that a recent increase in a tax benefit for workers who commute by mass transit isn’t enough to balance out the longstanding parking subsidy for those who choose to drive.

For decades, federal tax code had allowed employers to apply a portion of workers’ pre-tax salary to pay for parking at work—$250 per month before the recent adjustment. According to a 2014 analysis by TransitCenter, that tax subsidy added over 800,000 daily car trips to U.S. roads, while costing the U.S. Treasury $7.3 billion in revenue each year.

What looked like a win for both transit and traffic won’t do much to help either.

In a new analysis, the transportation research group TransitCenter has concluded that a recent increase in a tax benefit for workers who commute by mass transit isn’t enough to balance out the longstanding parking subsidy for those who choose to drive.

For decades, federal tax code had allowed employers to apply a portion of workers’ pre-tax salary to pay for parking at work—$250 per month before the recent adjustment. According to a 2014 analysis by TransitCenter, that tax subsidy added over 800,000 daily car trips to U.S. roads, while costing the U.S. Treasury $7.3 billion in revenue each year.

Lawmakers eventually responded to critiques of the parking subsidy by adding a parallel benefit for commuting by train or bus, but it topped out at only $130 a month as of last year. Then, in a legislative victory for transit advocates, last December’s omnibus budget and tax extension bill (known inside the beltway as the “omnibender”) set both benefits to $255 a month.

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