Congress Will PAY YOU to Avoid Public Transit in 2012

by Jeff Reeves | January 18, 2012 11:29 am

As part of the 2009 stimulus package passed by the Democratic controlled congress, commuters could qualify for a subsidy of $230 per month towards mass transit expenses. But your tax write off for parking? Ten bucks more at $240.

So much for Washington believing in public transportation.

If that isn’t crazy enough, the American Recovery and Reinvestment Act of 2009 (that’s the formal name for the “stimulus” bill) only offered a temporary increase to mass transit reimbursement. As of January 1, commuters getting a pre-tax reimbursement for transit will revert to just $125.

That’s right. You get twice as much of a write-off to drive to work instead of taking the bus. Read the details at the University of South Florida’s National Center for Transit Research[1].

You may pass go. Advance your token to free parking. Thanks for playing.

Now some folks may claim that in these tough budgetary times, we shouldn’t be wasting tax breaks on public transportation. Maybe. But shouldn’t parking subsidies at least get cut by the same amount? Or why not slash them both to zero, if you really want to save money?

Additionally, the move is also contradictory to the billions spent on mass transit upkeep and operation nationwide from both the local and federal level. The Department of Transportation asked for over $22 billion in public transit funding for 2012[2], despite the fact that some regional transit plans operate at steep losses.

Why would we discourage commuters from riding subways or busses?  The nonprofit commuter benefit program provider TransitCenter said in a recent release[3] that it expected the expiration of the benefit to lead to a decrease in ridership on mass transit systems. That means even steeper losses – and greater government support as a stopgap – if predictions hold true.

The icing on the cake? The tax break expired because our do nothing Congress, as it so often does, didn’t bother to revisit the issue before expiration. They just sat idly by and decided it wasn’t worth their time to either focus on the nation’s infrastructure or focus on cutting out a tax loophole to close the budget gap.

Yeah, those infrastructure jobs probably don’t matter in an era of high unemployment. And that budget shortfall probably doesn’t matter either. There are apparently bigger fish to fry.

We can quibble over carbon footprints, the American love affair with the automobile or the rather ugly state of the U.S. budget right now. But the bottom line is that this ridiculous disparity in parking vs. public transit subsidies shows Congress’ continued incompetence and lack of action in the face of real problems.


Am I reading too much into a tiny tax blip in the tax code? Share your thoughts by emailing – and we might reprint your views in our Money & Politics blog! Please include your name, city and state of residence if you’d like your comments to be published.

Jeff Reeves is the editor of Write him at editor@investorplace??.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.

The opinions contained in this column are solely those of the writer.

  1. National Center for Transit Research:
  2. $22 billion in public transit funding for 2012:
  3. in a recent release:

Source URL:
Short URL: