TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, January 20, 2012

The Need for a Tax Subsidy for Bicycle Commuting Expenses

Jennifer L. Shoulberg (J.D. 2011, St. Louis), Comment, Pedaling Toward a More Equitable Tax-Ride for Cyclists, 55 St. Louis U. L.J. 423 (2010):

Through the discussion of the historical treatment of similar employee commuting benefits and the application of a tax expenditure analysis, this comment sought to highlight the inequities and negative social policies reflected in our Tax Code. After looking back at the historical treatment of similar employee commuting benefits, it is clear that as we go forward into the next decade, we must change the current treatment of transportation fringe benefits under the Tax Code.

As stated in the introduction, our tax laws reflect our vision of who we are as a society and how we perceive ourselves. Under our current tax laws, the generous parking subsidies reward fuel consumption and pollution, while concurrently discouraging commuting by mass transit, carpools, and bicycles. To more accurately reflect our nation’s commitment to resolving the global energy crisis and to reducing our nation’s dependence on fuel, the Tax Code needs to be reformed. Specifically, the maximum nontaxable reimbursement for bicycle commuting expenses should be increased. Further, employees should be permitted to receive nontaxable benefits for bicycle commuting expenses and commuter highway vehicle and transit pass benefits concurrently. Such changes would not only eliminate the bias existing in the current code in favor of parking benefits which encourage socially undesirable behavior, but would also act as an incentive for employees to choose alternative methods of transportation.

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Here's a novel idea: how's about we simply repeal all existing commuter transportation tax subsidies, and let the commuter transportation market freely operate on an un-interfered-with-by-government basis?

Posted by: ColoComment | Jan 21, 2012 12:18:44 PM

I thought this was some kind of comedy, but I guess not.

I second Colocomment.

Posted by: save_the_rustbelt | Jan 22, 2012 5:34:25 AM

In my Tax Policy and Politics class, I assign my students to design a tax incentive one week and critique it the next. My example for them of a tax subsidy that sounds good but makes no sense is the Pedal Power America Tax Credit (Empowering Americans who Power Themselves). It was inspired by my experience at the Clinton Administration (where PPATC would not have made it to the bottom 50% of bonehead subsidy proposals) and the fact that I'm an avid cyclist.

The good students all figure out that there's no practical way to distinguish commuting use of bicycles from recreational use. A much better option, if we want to subsidize something, would be to subsidize the construction of facilities that make cycle commuting more feasible, like showers, lockers, and secure parking facilities at work and projects to make roads safer for cyclists. An even better option, as ColoComment suggests, would be to eliminate the subsidy for parking, which set off this race to the bottom in the first place.

Posted by: Len Burman | Jan 22, 2012 6:29:15 PM