

(Robert Thomson/The Washington Post)

With mass-transit advocates fighting for a change in federal tax rules that would make commuting more affordable on public transportation (and a little less so for motorists), some new voices have joined the discussion. In a study released Tuesday, two groups argue that the entire system of tax breaks for drivers and rail users should be overhauled.

“The tax exclusions for commuter parking and transit are costly and work at cross purposes,” according to Frontier Group, a clean-environment think tank in California, and TransitCenter, a New York organization that describes itself as “an independent civic philanthropy” dedicated to improving public transportation.

“The nation’s commuter tax benefits also fail to reward travel choices such as carpooling, carsharing and bikesharing that reduce vehicle commutes and/or improve the efficiency of the transportation system,” the study points out.

Some background:

Public transportation users whose employers participate in the federally supported benefits program can have up to $130 deducted from their monthly incomes, before taxes, to pay for transit fares. But workers who commute by automobile are eligible for a maximum pre-tax deduction of $250 a month for parking fees.

Transit advocates and agencies, including Metro, complain that the disparity creates an incentive for workday commuters to drive rather than use public transportation. A bill in the lame-duck Congress would level the playing field, setting the transit and parking benefits at $235 each. But it’s unclear what chance the legislation has of becoming law.

After studying the impact of the commuter benefits programs in big urban areas across the country, TransitCenter and Frontier Group recommended that Congress scrap the tax break for parking and make wholesale changes to the transit benefit.

In addition to supporting the argument by Metro and others that the tax break for parking steers workers away from public transportation, the report says that the parking benefit tends to be unavailable to low-income workers because, in many cases, their employers don’t participate in the program.

“Ultimately, the effect of the tax benefit for commuter parking is to subsidize traffic congestion by putting roughly 820,000 more cars on America’s most congested roads in its most congested cities at the most congested times of day,” the study says. “It delivers the greatest benefits to those who need them least, typically upper-income Americans, and costs $7.3 billion in reduced tax revenue that must be made up through cuts in government programs, a higher deficit or increases in taxes on other Americans.”

The report also criticizes the current transit tax-break program, saying it is used by “an estimated 2.7 million commuters, or about 2 percent of U.S. workers” and “weakly counteracts the negative impact of the parking tax benefit.”

Like the tax benefit for parking, “the transit tax benefit disproportionately aids those with higher incomes who work for large employers in dense downtown districts,” the study says. “Lower-income workers are less than one-fifth as likely to have access to subsidized transit benefits through the workplace as higher-income workers.”

To make the transit benefit more widely available, the report says, “the federal government should explore replacements … such as refundable tax credits for transit expenditures,” which would “deliver financial support to a broader range of transit system users while making the system more equitable.” In that way, “workers at organizations that do not offer a transit benefit program” would still be able to take advantage of the tax savings.

The report notes that in recent years, in addition to traditional carpooling, “there has been an explosion of new options for shared mobility, including various models of carsharing and bikesharing.” TransitCenter and Frontier Group urged federal policymakers to fashion tax benefits that extend to people using those modes of transportation, as well.

“The government should update its tax incentives to influence travel demand so that they fit the needs of today’s commuters,” TransitCenter’s executive director, David Bragdon, said in a statement. “Regardless of whether the Treasury is spending dollars or not collecting them in the first place, those dollars ought to be targeted for maximum positive impact on our transportation system.”