There is a bill before Congress to restore the parity between parking tax breaks and transit tax breaks. Most of the media, unions and environmental organizations are arguing to achieve parity in the tax subsidy, by raising the transit benefit to that of the parking benefit. Some have questioned whether it might not be better to reduce the parking benefit to that of the transit benefit (Level the Commuter Playing Field By Reducing the Tax Break for Parking, Streetsblog DC 2014-01-02). I’ll argue that there should be no tax benefit whatsoever for parking. As Shoup says, there is no such thing as free parking. Any parking subsidy at all encourages drivers to make poor economic choices, which means in this case that they are more likely to drive to work than they otherwise would be. Ultimately, there shouldn’t be any direct tax benefit for any modes of transportation, not even bicycles. We can better express societal priorities by rational expenditure decisions than by subsidies. In the short term, however, it might make sense to continue transit (and bicycling) subsidies in order to make up for the past perturbations that we forced into the system with parking subsidies.
We should be arguing for the complete elimination of the parking tax benefit. Period.
When people, and their employers, come closer to paying the real costs of parking, we will have less parking and fewer people commuting by motor vehicle. That is a benefit that doesn’t require a tax subsidy.
