Transportation
If You Ride the Subway to Work You're About to Get Screwed
Come January 1, the federal subsidy for riding mass transit to work will be slashed.
The federal commuter tax benefit is an obscure subsidy most Americans have likely never even heard of. But it's a simple illustration of the many subtle ways that official policy in the U.S. incentivizes private car travel over mass transit.
The benefit allows employees to devote a pre-tax chunk of their income to commuting costs, like parking garage fees or mass transit passes. Traditionally, though, the benefit has been nearly twice as generous for drivers as transit riders. In 2008, for example, transit riders were allowed to set aside $115 a month; car drivers (and their employers) could forgo paying taxes on up to $220 in income each month.