Commuting to work in this region, whether by car or mass transit, can be grueling and costly. The government can’t do much about the exasperation factor, but a federal tax break does defray the cost. Unfortunately, that commuter tax benefit treats transit riders like stepchildren when compared with motorists. It shouldn’t be this way.
If an employer offers the plan, a commuter can set aside up to $245 a month before taxes to pay for parking, rail, bus, subway or van pooling. That’s reasonable and equitable, but here’s the rub: The tax break for parking is permanent, but the one for mass transit isn’t. It has yo-yoed for years, and unless Congress acts, the maximum pretax set-aside for transit will drop after Dec. 31 to $130 a month.
For people who ride buses, the Long Island Rail Road or New York City subways to work, that would add hundreds of dollars a year in increased income tax liability to commuting costs. And employers in the plan would have to pay payroll taxes on money that is currently tax deferred.
Congress should make the transit tax break permanent. That’s the goal of the Commuter Parity Act that Rep. Steve Israel (D-Huntington) is pushing in the House of Representatives. Sen. Charles Schumer (D-N.Y.) said in a news conference on Monday that the Senate should extend the benefit for at least two years. Either way, basic fairness demands parity. So does common sense. Washington shouldn’t discourage the use of environment-friendly trains and buses.
The federal income tax code is littered with special-interest deductions and credits and loopholes. Congress should scrap almost all of them and lower tax rates across the board. That would make the tax code simpler and fairer. But as long as there is a commuter tax break, Congress shouldn’t play favorites about who gets what.
