As a further sign of some skewed priorities, as we enter 2014, pre-tax mass transit benefits will drop from $245 per month to $130 while parking subsidies will increase to $250 a month. The change comes on the heels of Congressional inaction in Washington, D.C. Andrew Grossman of The Journal runs down why the subsidy is dropping precipitously, and needless to say, no one who relies on mass transit is too happy about this change.
Even if Congress reauthorizes the $245 tax break, it is unlikely that the benefits will apply retroactively as administering such a change would be quite complicated. So while subway riders who need only a monthly MetroCard escape with their full subsidy in tact, anyone who is, say, a monthly commuter from Zones 4 or on beyond on Metro-North won’t have even half the cost of their passes covered by pre-tax deductions.
But fear not; Chuck Schumer is on it. “Mass transit is the lifeblood of the New York area, and this provision helps keep it flowing and affordable. Passing it will be a top priority in the New Year,” the state’s senior senator said. Happy New Year, indeed.
9 comments
Gotta love the way congress works. There is no real practical reason for tax breaks to have expiration dates, but they do anyway because 1) saying “we let it expire” sounds less nasty than saying “we voted to get rid of it”, and 2) forcing periodic action to keep the breaks in place in turn forces debate in which they may be used as political bargaining chips.
Or because the minority party would never let ANY controversial legislation through the Senate if it was permanent.
Breaking News: Rich politicians who drive/get driven everywhere let tax break for public transit commuters expire.
The real question for me is why do either of these exist? Why should there be subsidies for commutes of any type? I’ve alternatively walked, biked, used commuter rail, and driven to work and it seems unfair that the first two would never qualify for benefits but the latter would. Let’s stop all commuter subsidies.
Apparently for the past couple years there has been a $20/month benefit you can claim for biking to work.
It is kind of weird since there doesn’t seem to be anything useful that these tax breaks encourage. I’d guess they exist under an extension of the logic that business expenses can be reimbursed pre-tax.
It makes sense to subsidize all transportation because most everything people do when they leave their house creates some sort of economic activity way beyond the cost of the subsidy. A public transit subsidy in particular makes a ton of sense because it’s especially beneficial for lower income people, getting them to jobs and allowing them to spend more of their money in their neighborhood instead of on bus fare. It also serves as a “carrot” to get middle and upper income people out of their cars, reducing our collective carbon footprint.
I’ll say it again: I’m not afraid of an all entitlements plus defense federal budget, and was sorry to see the sequester end.
People can move from place to place, and take their problems with them. Let the federal government meet the basic needs of people, directly.
Infrastructure and housing stay in one place. The involvement of the federal government in these categories has, on balance, been wasteful, destructive and inequitable.
Senator Chuck, how about proposing the reverse — getting rid of all the federal surface transportation tax breaks and spending, and substituting in a higher federal share of Medicaid instead for those states stuck at 50 percent?
Otherwise, you pay for yours, we’ll pay for ours, and we’ll cut out the middleman in Washington.
This would never work. Giving money to the states just means a bunch of empty highways to nowhere will get built. State governments are by and large incompetent and throw their money away on highways, since that’s the easiest way to please rubes. Even the Benevolent Governor himself knows nothing other than highways highways highways highways and more highways for him to drive on.
Late Happy New Year to all! I read your post and came to know that Congress lets pre-tax commuter benefits lapse. I hope it will be a good congress for all.
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