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Transportation Benefit Reversal Moves Commuters in Wrong Direction




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May 12, 2014 | 935 views | Post a comment

By Michael Melaniphy

Public transportation is as popular as ever. Ridership just reached its highest level in 57 years. Americans took 10.7 billion trips on subways, buses, and trains in 2013.

But this trend may hit a roadblock if Congress does not take action in the coming months to reverse a tax inequity that took effect this year on commuters who use public transportation.

Fortunately, the Senate Finance Committee recently voted to put public-transportation riders on the same tax footing as drivers. The rest of Congress must follow suit.

As part of the "fiscal cliff" deal struck in January 2013, Congress offered public-transportation commuters a $245 pre-tax benefit to help offset their fares. Drivers got the same deal, to assist them with the cost of parking.

But parity between the two benefits expired at the end of 2013. The parking benefit increased this year to $250, thanks to a cost-of-living adjustment implemented by the Internal Revenue Service. The public-transportation benefit, meanwhile, declined to $130.

This effective tax hike provides a strong disincentive for people to commute by public transportation.

More than fairness between drivers and public transportation-riders is at stake. A reduction in the commuter tax benefit subsidizes car travel at a time when the benefits of public transportation have never been more apparent.

These benefits aren't just abstract or communal. People in two-person households can save more than $9,000 a year by living with one less car -- and thereby dodging the maintenance and fuel expenses associated with owning an extra car.

Public transportation can also boost home prices. Residential properties located near public transportation links with high-frequency service post values 42 percent higher than those in other communities.

Alternatives to driving, like public transportation, even offer health benefits. Regular driving on congested roads has been linked to everything from headaches and flu to cardiovascular disease and strokes.

The Federal Transit Administration estimates that public-transportation riders walk about 19 minutes a day -- well above the national average of 6 minutes and just shy of the 22 minutes recommended by the Centers for Disease Control.

It's no wonder that light-rail users are 80 percent less likely to be obese.

Even those who have no choice but to drive to work each day are better off because of public transportation. After all, increased reliance on subways, trolley cars, ferries, and the like results in less congested roads and fewer traffic accidents.

By increasing tax benefits for drivers -- and further picking the pockets of public transportation-riders -- the federal government ignores these benefits.

Congress must reverse course and ensure that those who take public transportation enjoy the same tax benefit as those who drive.

Michael Melaniphy is president and CEO of the American Public Transportation Association.
 
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