FISCAL CLIFF TRIGGER WARNING! Obviously there’s a lot to be annoyed about in this deal, but there are a few bright spots that aren’t getting much attention. Renewed tax credits for wind energy are cool, and even more people will benefit from a near-doubling of a tax benefit for transit riders.
The benefit is basically a tiny tax shelter for the dollars you’re spending on public transportation, available if your employer participates in a federal program. On Dec. 31, 2011, that shelter was shrunk from $230 a month to $125, while the benefit for people who drive to work and pay for parking was increased from $230 to $240 — meaning the government was incentivizing people to drive instead of take public transit. Now, thanks to the fiscal-cliff deal, tax benefits for transit takers and car parkers will be equalized — both will get a benefit of up to $240 a month.
Transit advocates hailed the legislation. “We’ve been pushing for transit equity for months,” said Rob Healy, vice president of the American Public Transportation Association. “From our perspective, we felt it was very, very important that the federal tax code not bias one mode versus another.” He added: “You shouldn’t be making your choices based on a tax code which treats parking better than it does transit.”
This should take a bit of the sting out of new fare hikes going into effect for transit systems (at least if you have a job …). That is, it’ll take the sting out for 2013. Because here’s the bad news, transportation lovers: This is only a one-year extension, set to expire on Dec. 31 unless it’s renewed.