Americans who ride public transportation will face increased commuting costs if Congress does not act to extend the transit commuter benefit by the end of the year, according to the American Public Transportation Association (APTA). This will in effect create a disparity in the federal tax code in favor of the car driver.
In addition, this increased commuting cost will hit the very workers who may need it the most, according the the association. APTA says that 70% of those who rely on public transit have household incomes from $15,000 to $99,000 a year, according to its latest demographic survey of riders.
“Unless Congress acts, there will be a financial bias in the federal tax code against public transit use,” said APTA President Michael P. Melaniphy. “We are seeking to maintain parity with the parking benefit to ensure that there isn’t a disincentive to take public transportation.”
Legislation to temporarily establish parity between parking and transit/vanpool benefits at $230 per month per commuter was extended under the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act through 2011. However, the transit/vanpool portion of the benefit will revert to $125 per month when the provision expires at the end of the year while the parking benefit increases to $240.
APTA is calling on Congress to act now to permanently extend the maximum transit commuter tax benefit to the level equal to the parking tax benefit.
“If the transit commuter benefit is allowed to expire, it will serve as a tax increase on transit riders and their employers,” said Melaniphy. "It will amount to allowing payroll taxes to increase on both employees and the employers who offer the benefits. People should have reasonable transportation choices and federal tax law should maintain a level playing field for those choices.”
APTA officials say public transit riders should tell Congress to support the commuter transit benefit in any tax proposal passed before the end of the year. In addition, for the long term, riders should encourage Congress to support Representative Jim McGovern’s (D-MA) legislation in the U.S. House of Representatives and U.S. Senator Charles E. Schumer’s (D-NY) legislation on the Senate side to permanently extend parity for this benefit. To contact your representative, visit http://capwiz.com/napta/home/.