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Federal Government Encourages Car Use While Fighting Congestion

Posted by: Nate Berg

17 August 2007 - 9:00am

Despite the federal government's recently-awarded grants to support toll roads and other measures to reduce traffic congestion, many subsidies still exist that encourage car use.

"This week, the department announced $848 million in grants to help cities discourage people from driving, in many cases by imposing new tolls or fees."

"But at the same time, another arm of the federal government seems to be sending a very different message. Congress provides a tax break to many of those same drivers to help them shoulder the costs of taking their cars to work."

"Close to 400,000 commuters nationwide — about half of them in the New York City area — take advantage of a provision in the federal tax code that allows them to use up to $215 a month in pre-tax wages to pay for their parking at work, according to executives at corporate benefits firms that specialize in administering the tax break."

"By making driving cheaper, the tax benefit may weaken the intended effects of the new traffic-fighting initiatives."

Full Story: Mixed Signals: Driving to Work as a Tax Break
Source: The New York Times, August 16, 2007
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