The Tax Law That Encourages Solo Driving

The US withdrew from the Paris Climate Agreement on June 1st and mayors from around the country protested. If they’re serious about climate action, our city leaders can act now to balance incentives for commuter travel modes.
By Tony Jordan | Sep 07, 2017 |
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By Tony Jordan | Sep 07, 2017 |
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The US withdrew from the Paris Climate Agreement on June 1st and mayors from around the country protested. If they’re serious about climate action, our city leaders can act now to balance incentives for commuter travel modes.

Tax law currently allows for a pre-tax benefit for parking and transit of up to $255 a month. Employers can mix-and-match this benefit for drivers, say $100 for transit and up to $145 in parking. But for people who ride bikes to work, only $20/month is allowed. Furthermore, an employee who takes the $20 for biking can’t get a free bus pass!

It’s bad enough when parking is free (even at our National Renewable Energy Lab), but it’s crazy to have tax benefits for people to drive alone. Fortunately, mayors can have employers provide equivalent “cash-outs” for employees who don’t opt-in to driving. California already does it, and Washington, DC is next. It’s a cost-neutral policy that can have a big impact.

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