New Year's Resolutions: Eat Healthy, Get In Shape...Drive More?
On Americans' list of New Year's resolutions, driving more probably doesn't sit at the top. In fact, Americans are driving less, and drivers’ license rates for teens are going down. However, driving more is exactly what Congress is (perhaps unwittingly) encouraging Americans to do in the new year.
Through their employers, commuters are able to set aside money each month - before taxes - to help pay for their trip to work, whether it's by transit, car, or bike. For the last few years, both transit riders and car commuters have been able to take advantage of squirreling away up to $230 each month, for a yearly pre-tax savings in the 4-figure range.
However, late in 2011, Congress failed to extend this benefit for transit commuters. Effective January 1, the pre-tax benefit for transit commuters was cut nearly in half, from $230 to $125. The parking benefit, on the other hand, was raised from $230 to $240.
Things weren't always this backward. They used to be worse.
Back in the 1980s, employers could pay an unlimited amount for employee parking as a tax-free benefit; there was no transit benefit. In 1984, a $15 transit benefit hit the books, and in 1992 this was raised to $60, as the parking pre-tax benefit was capped at $155. Both benefits grew at $5 per year as a cost-of-living adjustment, but this disparity remained until 2009, when, as part of the Recovery Act, the transit commuter tax benefit was raised to a maximum of $230 per month to match the parking benefit (and bicyclists got a small benefit for the first time too). The transit commuter benefit was extended at the same level as the parking benefit in 2010.
However, Congress took a big step backwards when it let the 2010 extension expire, essentially raising the taxes of transit commuters across the country and (knowingly or not) encouraging more people to drive to work in 2012.
It's a shame that Congress continues to set policies that encourage driving and fuel our oil addiction and worse to do it by taking money out of the pockets of transit riders. Slashing the transit benefit means increased driving, congestion and oil use, as well as the carbon pollution and asthma-related smog that tag along.
There is good news, though, as Senator Charles Schumer is leading an effort to bring the transit benefit back up to be even with the parking benefit, and retroactive to January 1st. With our oil addiction draining billions from local economies and polluting our environment, in 2012, Congress should resolve to put transit – as well as biking, walking, and other transportation options that reduce our oil dependence – at the forefront of federal transportation policy. Fixing the transit commuter tax benefit would be a step forward.
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-- David Loss and Rachel Butler