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Conference Report of Tax Cut and Jobs Act - Cuts commuter benefit that helps people bike to jobs
The conference report that reconciles the Senate and House tax bills keeps the Senate provisions that eliminate the bicycle commuter benefit.
Details on the provisions, but not an explanation of the reasoning behind them, can be found in the Joint Explanatory Statement issued by the Conference Committee on pages 106-107 and can be found in the bill at Section 11047 on pages 93-94 of the Conference Report.
All expenses related to commuter benefits can no longer be deducted by employers, according to pages 249-251 of the statement.
This is obviously disappointing and a big missed opportunity to reform commuter benefits so that they better serve low and middle income employees who are usually not offered the current commuter benefits and provide incentives for reducing congestion by encouraging people to bike, walk, and take transit - rather than continue our current benefits that overwhelmingly subsidize car commutes for high income workers in congested cities.
The Bicycle Commuter Benefit was used by few of the over 850,000 Americans who commute by bike each year. While this is a disappointing sign that the federal government does not see increasing bicycling to work as a priority, we are confident that in the long-term we can create a better benefit that is more likely to be used by citizens of all income levels. If you are fortunate enough to work for an employer who offers the Bike Commuter Benefit or wants to provide incentives to bike, you can still be reimbursed under the Bike Commuter Benefit until next month if this bill passes.
To see our analysis of current commute benefits and some options for long-term solutions, please see this short presentation, which lays out key facts, such as:
- Only 7% of workers are offered tax-preferred commuter benefits
- Workers in the top 10% of income are seven times more likely to receive benefits than those in the bottom 10%
- 85% of the cost of commuter benefits subsidizes parking, at a cost of over $7 billion per year (about 10 times the amount spent per year on biking and walking by the federal government)
- The Bike Commuter Benefit costs $5 million per year, or .003% of the cost of the current tax bills
- Research suggests that current benefits lead to less walking and biking, and more driving alone.
If you would like to express your feeling that commuter benefits must change so that they reach low and middle income employees and reduce congestion, please sign our petition.