Study: The Parking Tax Benefit Subsidizes Congestion

A new report, "Subsidizing Traffic Congestion: The Multibillion-Dollar Tax Subsidy That’s Making Your Commute Worse," was released earlier this week by TransitCenter and Frontier Group.

2 minute read

November 20, 2014, 9:00 AM PST

By Maayan Dembo @DJ_Mayjahn


According to Tanya Snyder at Streetsblog USA, the "Subsidizing Traffic Congestion: The Multibillion-Dollar Tax Subsidy That’s Making Your Commute Worse" report by TransitCenter and the Frontier Group finds that the annual parking commuter tax subsidy costs taxpayers an estimated $7.3 billion in foregone revenue. In addition, this backwards incentive adds an additional 820,000 cars to commuting rush-hour traffic each weekday, creating more congestion and lost productivity.

In January 2014, Congressional action caused the commuter transit benefit to fall to $130 each month from one's pre-tax benefits, if driving benefits are $245 per month. As Snyder writes, "[most] advocacy efforts centered on commuter tax subsidies attempt to raise the transit benefit — currently capped at $130 per month. Last week, for instance, two members of Congress pledged to fight for an equal commuter benefit for transit and parking. TransitCenter and the Frontier Group argue that this is the bare minimum to strive for. The real impact lies in simply getting rid of the parking benefit."

Indeed, "TransitCenter and Frontier Group estimate that while most people don’t change their commuting behavior based on the incentives created by these tax benefits, about 2 percent do — and that 2 percent drives 4.6 billion additional miles per year. To make matters worse, they do that extra driving at peak hours, in crowded downtown areas, worsening congestion that the country’s transportation policy is supposedly oriented toward fixing."

The report recommends eliminating the parking tax benefit, making federal support for transit more progressively equitable, and improving and expanding the current transit tax benefit.

Tuesday, November 18, 2014 in Streetsblog USA

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Use Code 25for25 at checkout for 25% off an annual plan!

Redlining map of Oakland and Berkeley.

Rethinking Redlining

For decades we have blamed 100-year-old maps for the patterns of spatial racial inequity that persist in American cities today. An esteemed researcher says: we’ve got it all wrong.

May 15, 2025 - Alan Mallach

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

May 14, 2025 - Diana Ionescu

Front of Walmart store with sign.

Walmart Announces Nationwide EV Charging Network

The company plans to install electric car chargers at most of its stores by 2030.

May 7, 2025 - Inc.

Aerial view of Albuquerque, New Mexico at sunset.

New State Study Suggests Homelessness Far Undercounted in New Mexico

An analysis of hospital visit records provided a more accurate count than the annual point-in-time count used by most agencies.

May 16 - Source NM

Close-up on white bike helmet lying on pavement with blurred red bike on its side in background abd black car visible behind it.

Michigan Bills Would Stiffen Penalties for Deadly Crashes

Proposed state legislation would close a ‘legal gap’ that lets drivers who kill get away with few repercussions.

May 16 - Wood TV 8

Muni bus on red painted bus-only lane in downtown San Francisco, California.

Report: Bus Ridership Back to 86 Percent of Pre-Covid Levels

Transit ridership around the country was up by 85 percent in all modes in 2024.

May 16 - Mass Transit