Skip to Content
Streetsblog California home
Streetsblog California home
Log In
Streetsblog USA

America Spends $7.3 Billion a Year Paying Affluent People to Drive to Work

Photo: TransitCenter

Every day, the streets of American cities are more clogged and polluted at rush hour because the federal government pays people to drive to work.

The culprit is the commuter tax benefit, a $7.3 billion annual subsidy that mainly offsets parking costs for people who drive to work. The people who benefit the most are high earners who drive into the U.S.'s biggest, most congested cities and can write off the maximum $255 per month in tax-free income.

The tax break for car commuters is not only regressive, it also generates traffic at exactly the worst time -- rush hour -- and in exactly the worst places -- the central areas of major cities, according to a new study from TransitCenter and the Frontier Group [PDF].

Transit center graph
A model developed by Andrea Hamre at Virginia Tech shows the massive effect of commuter subsidies on mode choice in major American cities. Graphic: TransitCenter
false

Placing a finger on the scale of people's commute decisions can have a profound influence on behavior. A model developed by Virginia Tech researcher Andrea Hamre estimates that in five cities -- Washington, DC, Baltimore, Philadelphia, Newark, NJ, and New York City -- a subsidy solely for parking at work would reduce transit's share of the commuting pie 25 percent compared to a scenario with no commuter subsidy.

The federal government does allow transit commuters up to $255 a month in pre-tax income to offset the cost of fares. But people can claim it only if their employer offers the benefit. The parking subsidy is much more widely used -- the government spends $7.3 billion a year on it, compared to $1.3 billion for transit.

Cities would be better off if both subsidies were eliminated. TransitCenter estimates that without the commuter tax benefit, 66,000 fewer people would drive to work in the 25 largest U.S. cities.

As long as the commuter benefit persists, local governments can at least help even the playing field. A number of cities, including New York, DC, and San Francisco, have ordinances requiring most employers to offer the transit benefit to their workers.

Stay in touch

Sign up for our free newsletter

More from Streetsblog California

Metro and Caltrans Expect to Complete Torrance 405 Freeway Widening Project Next Month

Metro and Caltrans are adding nearly two miles of new auxiliary freeway lanes, a new on-ramp, and widening adjacent streets including Crenshaw Boulevard and 182nd Street

July 22, 2024

Philadelphia Demands More Than ‘Flex-Post’ Protected Bike Lanes After Motorist Kills Cyclist

Pediatric oncologist Barbara Friedes was struck while biking on a "protected" path. Advocates argue that flex posts should be replaced with something far better.

July 22, 2024

Monday’s Headlines

Caltrain's electric trains to start limited weekend service soon; San Diego gets "tap-to-pay"; SF drivers demand "respect"; More

July 22, 2024

Advocates Share What It Takes to Fight Highway Expansions in Court 

What does it take to sue your state DOT? Time, money, the right partners, and a little creativity, a recent survey of activists found.

July 19, 2024

Friday Video: Paris Does it Again

Come for the bike-friendly streets, but stay for adopt-a-tree program and all the car-free school roadways.

July 19, 2024
See all posts