Bad policy, the sequel

[womzilla]

Back in December 2010 I complained:

The price of my monthly MTA (commuter rail) ticket just jumped 10%. . . . I hate how the Great Recession is slowly (or not-so-slowly) strangling government services, especially the services I use that encourage better methods of living, as public transit does.

Another example of that strangulation, about which I've seen very little discussion: The IRS has a policy whereby you can deduct a monthly amount from your taxable wage if you spend it on commuting expenses. As a wage deduction, this directly reduces your taxable income, so you get a discount on your commuting costs roughly equal to your highest marginal wage tax rate.

Until 2010, the maximum amount you could deduct for parking was much higher than the maximum amount you could deduct for mass transit: approximately $215/month for parking vs. $120/month for mass transit. In 2010, though, the mass transit benefit was increased to parity with parking, which is, if anything, not going far enough--tax policy should be used to encourage behavior which is less destructive rather than more destructive.

With the start of 2012, the mass transit benefit cap has dropped back down to $125/month, while the parking benefit increased to $240.

Stupid. Stupid. Our country is broken.

Comments

[orangemike.livejournal.com]

It is not the Great Recession strangling government services, but the Norquistian cultists using the depression they created as an excuse to strangle gummint services.

[womzilla.livejournal.com]

"Let's raise taxes!" translates to "Let's cut government services!" only by a very circuitous route. It's more like "Liberals like public transit, so let's punish anyone who uses it, even the wealthy!"