Study: The Parking Tax Benefit Subsidizes Congestion

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.