The UN climate talks going on in Durban aren’t likely to lead to any major breakthroughs, but it would be nice if the US could at least avoid backsliding on the better-than-nothing steps it’s taken on emissions. One important step for controlling emissions is ensuring the availability of affordable public transportation. Congress has helped make public transit more affordable for workers for the past three years by temporarily raising the limit on the monthly amount of pretax salary that can be set aside for transit. The problem is that limit, currently set at $230 per month, is set to drop to $125 per month in 2012 if Congress doesn’t act to extend the higher benefit amount.
Ashlea Ebeling reports in Forbes that 2.7 million families take advantage of this commuter benefit, and those in the 40% tax bracket who put aside the maximum of $230 per month for public transit stand to pay an extra $504 in taxes next year if the maximum drops to $125. Their employers will also be on the hook for additional payroll tax.
My employer offers pre-tax transit and parking benefits, and I set aside $60 each month for bus fare. My co-workers who take the subway from the outer reaches of DC’s Metro system can spend $5.20 per ride during rush hour, though, which works out to $228.80 per month.
I realize that this country has a budget problem, and that those of us who are employed in jobs that offer pre-tax transit benefits are already better off than a lot of our neighbors – and I’m fine with the more fortunate paying more in taxes so the US can fund healthcare, education, and other such priorities. What upsets me is the fact that if Congress doesn’t act, pretax parking benefits will become more generous than pretax transit benefits. Ebeling notes that the monthly maximum for pretax parking benefits will automatically rise from $230 to $240 for 2012. Tax incentives will favor driving over taking public transportation, and that’s a recipe for worsening emissions and congestion. (Even solo drivers ought to favor cheaper, more convenient public transportation, because everyone who leaves the car at home and takes the bus helps reduce congestion.) Whether Congress raises the transit limit or lowers the parking limit, it ought to put the two on equal footing.
Ebeling concludes, “A permanent solution this year is unlikely. The best hope for commuters is that Congress will include at least another one-year extension of the transit parity provision along with other so-called “extenders”-tax laws that are on one-year life support expiring on Dec. 31, such as the state and local sales deduction and the higher education tuition deduction.” The Commuter Benefits Work for Us website is generating letters to Congress urging the permanent establishment of parity for parking and transit benefits. Such legislation would not only help commuters, but show that the US is at least taking some small steps toward environmental sustainability.