Fortunately, Sen. Charles Schumer (D-N.Y.) and Rep. James McGovern (D-Mass.) have introduced the Commuter Benefits Equity Act of 2011, which would permanently set parking and transit benefits at the same amount.
Across the country, more than 2.7 million commuters utilize the transit benefit to save on their commutes to work. If the transit benefit were to be capped at $120 per month, the subsequent increase in commuting costs would be equivalent of a transit tax of 20 to 40 percent due to higher federal income and payroll taxes.
Will many of these commuters start driving to work if transit benefit parity expires in January? It’s hard to know for sure, but in these tough economic times when people are especially cost-conscious, it’s a fair bet that a significant number will. The result will be even worse traffic congestion than normal — a big reason why even those who drive to work ought to strongly support the Commuter Benefits Equity Act.
Beyond the personal savings realized with transit benefits, the accounts saved employers more than $300 million in payroll taxes in 2010. They helped conserve 184 million gallons of gas and saved Americans $8.4 billion at the pump. And they helped prevent 1.8 million tons of carbon emissions from entering the atmosphere and contributing to climate change.
It’s important to understand that the Commuter Benefits Equity Act does not create a tax bias toward public transit — it simply keeps the tax treatment of parking and public transit on a level playing field, where it should be. Even in our current politically-polarized environment, this is one bill that should pass with strong bipartisan support.
I encourage members of Congress to pass the Commuter Benefits Equity Act before the end of the year. Let’s not allow discrimination to re-enter the tax code — instead, let’s do something that helps workers, employers, the economy, the environment and our quality of life all at once.
Joe Jackson is CEO of WageWorks Inc., a benefits provider, which is a member of Commuter Benefits Work for Us, a coalition to preserve the transit portion of the commuter benefit.