Tax Break For Mass-Transit Commutes May Soon Be Slashed Unless Congress acts, the current monthly benefit for commuters using public transportation will be cut nearly in half starting Jan. 1. On the other hand, those who drive to work will see their benefit for parking costs rise slightly.
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Tax Break For Mass-Transit Commutes May Soon Be Slashed

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Tax Break For Mass-Transit Commutes May Soon Be Slashed

Tax Break For Mass-Transit Commutes May Soon Be Slashed

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Commuting by public transport is about to get more expensive for some people - unless Congress acts quickly. For the last four years, people who drive to work, and people who drive to reach mass transit, have been getting a federal tax break if they have to pay for parking. Starting on New Year's Day, the folks who use public transit will lose half that tax break. But the folks who drive all the way to work will get a slightly bigger break.

NPR's David Welna explains why.

DAVID WELNA, BYLINE: They're what the IRS calls qualified transportation fringe benefits. Right now, you can get up to $245 a month in wages tax free, if they're used either for mass transit or workplace parking. Come Jan. 1st, that's reduced for public transportation $130 a month. Drivers, on the other hand, see theirs rise by $5, to $250.

DAN SMITH: It doesn't make sense at all, the fact that you get a bigger tax break for driving your car than riding a train.

WELNA: Dan Smith lobbies Congress on tax issues for the U.S. Public Interest Research Group. He says many don't realize that the parity for transit and parking tax breaks vanishes in the new year. But they soon will.

SMITH: People who take public transit to work, ride the train to work, they will notice when suddenly, the tax deduction that they can get for doing that will suddenly fall by half.

WELNA: And Oregon Democratic Congressman Earl Blumenauer, who rides his bike to work, is sounding the alarm.

REP. EARL BLUMENAUER: We've heard lots of talk about fiscal cliffs, a dairy cliff, but at the end of the year, we are facing a transit commuter cliff.

WELNA: Blumenauer has rounded up five House Republicans and 44 fellow Democrats, to co-sponsor legislation keeping the parking subsidy, which by law is automatically renewed, equal to the transit subsidy, which requires congressional approval every year.

BLUMENAUER: You might tilt it the other way and provide greater benefit for people who are having less impact on the planet. But the fact is, this is embedded, ingrained and accepted. So we want to at least just have transit parity for the full range of commuter options.

WELNA: Indeed, in Congress, eliminating or even reducing the parking subsidy is a bipartisan non-starter.

SEN. BARBARA BOXER: My own view is there are some people - many people - who don't have the luxury of being able to take transit.

WELNA: California Democratic Sen. Barbara Boxer, chairwoman of the Environment and Public Works Committee. Boxer defends the tax break for people who instead of taking public transit, drives to work.

BOXER: I don't agree that you should put one group against the other. I think we should encourage fuel-efficient cars, and if someone really needs their car for work, I don't have a problem with saying, you know what? There's enough expense here, we can make sure that this isn't exorbitant for you.

ELYSE LOWE: Well, that's actually very unfortunate.

WELNA: Elyse Lowe is one of Boxer's constituents. She's also executive director of Move San Diego, a group advocating smart growth in that city. For Lowe, it makes sense to subsidize public transit users, not drivers.

LOWE: This is at the heart of getting people to change their travel behaviors through economic incentives and typically, people don't actually look at their own personal behavior until there's some sort of economic reason to do so.

WELNA: Rhode Island Democratic Sen. Sheldon Whitehouse agrees. He's skeptical, though, that Congress can act in time to keep the transit break on par with the parking subsidy.

SEN. SHELDON WHITEHOUSE: What certainly doesn't make sense is to favor that over using public transportation. But given the general level of blockade of anything and everything by our Republican friends around here, I can't promise that we'll get to that.

WELNA: Making parity between transit and parking subsidies - one more casualty of congressional gridlock.

David Welna, NPR News, the Capitol.


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