5 ms·

Interesting dive into the tax code. I wonder how the article would have read if the author researched the amount of subsidies that go into public transportation

by mgreg 9y ago

Interesting dive into the tax code. I wonder how the article would have read if the author researched the amount of subsidies that go into public transportation. Public transport subsidies are a very material portion of most city budgets as rider's fares typically pay for less than half the cost of running the bus/subway/light rail system. As an example San Francisco spends about $1 billion of its $9 billion city budget funding Muni - more than 10% of the entire city budget.

rileymat2 9y ago
I am not sure how it was calculated but the article did do that (but it seems like an underestimation): "True, there’s also a tax benefit for mass-transit commuters that costs the government about $1.3 billion a year. TransitCenter says that while it’s good as far as it goes, “it is overshadowed by the parking tax benefit’s much larger adverse impact.”"
- mgreg 9y ago
  You're correct but this tidbit also exposes the article's limited scope. It's sweeping the cost of public transportation under the rug and then providing unsubstantiated opinion on the "adverse impact" of the thing the author doesn't like. To be clear I'm not arguing for or against parking or public transportation. But I do think we should be forming policies with more data and less opinion.
- turc1656 9y ago
  That's not quite the same thing. What you quoted is referring to the IRS tax exemption for the first $255 per month spent on approved commuting costs (parking and mass transit). What mgreg refers to is the direct money that is used to fund/subsidize the cost of operating bus/train networks in urban areas. The cost of those tickets are less than they would be without the subsidies. These are two totally separate things.
c3534l 9y ago
Subsidies go into public transit, but for a reason. Even if you drive and never use public transportation you benefit from it by having freer movement in the roads. The whole point isn't that such a subsidy exists, it's asking whether it's a subsidy we actually want to be making. Additionally, it's not surprising that it makes up a large portion of city budgets, because city governments have the most narrow and local focus of any other in America. They're often not even on the level of county government, let alone state government.
xsmasher 9y ago
Drivers don't pay the full cost of maintaining the roads, so if it's a question of which system we should subsidize, I'd rather subsidize mass transit. It has less environmental impact and takes up less space. If it's cheaper too, that'd be great.
- stevenmays 9y ago
  Yes, they do. Highways are largely maintained through the gas tax.
  - grardb 9y ago
    Nope. http://usa.streetsblog.org/2011/01/04/actually-highway-builders-roads-don%E2%80%99t-pay-for-themselves/ http://usa.streetsblog.org/2011/01/04/actually-highway-build...
    - AnthonyMouse 9y ago
      Numbers like that are misleading. Roads that go through rural areas don't pay for themselves because they have little traffic. But those are also not the areas where anybody is talking about adding lanes to the roads. And in the areas with actual congestion, tax on the gas burned driving on those roads more than pays for them.
      - grardb 9y ago
        If we're playing this game, we could go a step further than that and say that roads with little traffic need little maintenance. Roads with more driving will need to maintained on a more regular basis. If someone has data/knowledge that this isn't true, though, please let me know (genuinely, as I can't find any information about this). Also, for the record, adding lanes doesn't reduce traffic congestion[1]. Not sure if you were saying that. Even if we did "profit" from building more lanes/roads, it's only because we're externalizing other costs (environmental damage, the cost of space/real estate, etc.). I don't think this is a good strategy. [1] https://www.wired.com/2014/06/wuwt-traffic-induced-demand https://www.wired.com/2014/06/wuwt-traffic-induced-demand
JackFr 9y ago
> as rider's fares typically pay for less than half the cost of running the bus/subway/light rail system. as drivers pay for none of the cost of maintaining the roads.
- turc1656 9y ago
  That's precisely what the gas tax is supposed to fund. All drivers who purchase gas help pay for road maintenance.
deleted 9y ago
[deleted]
TulliusCicero 9y ago
The difference is that cars have way more externalities than transit does. Pollution, noise, danger to others, space taken, cars are way worse at all of these. Cities quite rationally want people to walk and use transit more, because those modes fit the fabric of a city better. Of course you'll still need car trips for some things, but a blanket subsidy like this for something you want less of is nonsense.
grardb 9y ago
I feel like this is almost an apples-to-oranges comparison. Yes, public transit "competes" with cars, but... Is the government subsidizing something run by the government really "subsidization?" It may be federal vs state/city, sure, but I don't see this as being a problem, especially since public transportation is beneficial in so many ways (costs people less money than car ownership, less harmful on the environment, less harmful to health, etc.). I do, however, see it as a problem when the federal government subsidizes private transportation, which is objectively harmful to cities (and most things in general, really). > rider's fares typically pay for less than half the cost of running the bus/subway/light rail system Let's not forget that drivers also only pay for half of the cost of roads[1]. If we're only going to pay for a portion of something, I think it should be public transportation. In my mind, the whole point of the government is to provide us with services. Providing us with transit makes sense. Providing us with spaces that we can only use if we pay a bunch of money to private corporations (car manufacturer + oil companies mainly) to buy large, dangerous, private, pollution-creating machines? I'm opposed to that. [1] http://usa.streetsblog.org/2013/01/23/drivers-cover-just-51-percent-of-u-s-road-spending/ http://usa.streetsblog.org/2013/01/23/drivers-cover-just-51-...
- AnthonyMouse 9y ago
  > Is the government subsidizing something run by the government really "subsidization?" Yes. Having the government do anything with public money is subsidization. But it often makes sense to do things like that, especially in areas where there is a large up front cost to build something and thereafter the cost per use is negligible. It makes sense for the government to build subways in cities and then charge zero dollars to riders, because everyone benefits from their existence (even non-riders, like stores whose customers arrive on the subway) and once the construction cost is paid it makes no sense to discourage use of the sunk-cost infrastructure by charging fares. And fare collection is inefficient because a nontrivial proportion of the fares are spent collecting them. But it also makes sense to do the same thing for roads for the same reasons. The real question is where and when to subsidize each. It makes no sense to build subways in rural Kansas that no one would ride, or new roads in Manhattan. When you see traffic congestion, the question is how to most effectively eliminate it. Sometimes that means improving mass transit so less people have to drive. Sometimes it's more cost effective to just add a lane to the road. Sometimes the underlying problem is that real estate prices are too high causing people to have to commute too far and the only real answer is to build new housing.
danans 9y ago
Car drivers impose a large externalized cost upon any city, from traffic and congestion, to local pollution and its health consequences, to increased accident rates. We've gotten used to those costs, and to the degree that we are even aware of them, we've accepted them as the price of our convenience. Transit systems do not impose such high externalized costs per commuter moved, but no doubt they are less convenient for individuals.
- pavel_lishin 9y ago
  > no doubt they are less convenient for individuals. It depends; in New York, it would be incredibly inconvenient for me to own a car to go from our apartment in upper manhattan to my job in midtown.
  - danans 9y ago
    Same for me with BART to downtown SF but I also think I'm incredibly lucky to be in the situation where mass transit is the most convenient option.
- autokad 9y ago
  if people couldn't drive to your cities, your city would become an abandoned wasteland of crowded concrete and glass. people like you have gotten use to enjoying all the tax and revenues from people who do not think like you, like use a car, but become unaware its subsidizing your amenities (such as mass transit).
bryanlarsen 9y ago
Public transit is a road subsidy. Transit provides 23% or the transportation in San Francisco in a lot less than 23% of the space. If that was to disappear, SF would need 50% more road space for a similar level of congestion. That would cost a lot more than $1 billion.

by mgreg 9y ago

rileymat2 9y ago

I am not sure how it was calculated but the article did do that (but it seems like an underestimation): "True, there’s also a tax benefit for mass-transit commuters that costs the government about $1.3 billion a year. TransitCenter says that while it’s good as far as it goes, “it is overshadowed by the parking tax benefit’s much larger adverse impact.”"

mgreg 9y ago
You're correct but this tidbit also exposes the article's limited scope. It's sweeping the cost of public transportation under the rug and then providing unsubstantiated opinion on the "adverse impact" of the thing the author doesn't like. To be clear I'm not arguing for or against parking or public transportation. But I do think we should be forming policies with more data and less opinion.
turc1656 9y ago
That's not quite the same thing. What you quoted is referring to the IRS tax exemption for the first $255 per month spent on approved commuting costs (parking and mass transit). What mgreg refers to is the direct money that is used to fund/subsidize the cost of operating bus/train networks in urban areas. The cost of those tickets are less than they would be without the subsidies. These are two totally separate things.

c3534l 9y ago

Subsidies go into public transit, but for a reason. Even if you drive and never use public transportation you benefit from it by having freer movement in the roads. The whole point isn't that such a subsidy exists, it's asking whether it's a subsidy we actually want to be making. Additionally, it's not surprising that it makes up a large portion of city budgets, because city governments have the most narrow and local focus of any other in America. They're often not even on the level of county government, let alone state government.

xsmasher 9y ago

Drivers don't pay the full cost of maintaining the roads, so if it's a question of which system we should subsidize, I'd rather subsidize mass transit. It has less environmental impact and takes up less space. If it's cheaper too, that'd be great.

stevenmays 9y ago
Yes, they do. Highways are largely maintained through the gas tax.
- grardb 9y ago
  Nope. http://usa.streetsblog.org/2011/01/04/actually-highway-builders-roads-don%E2%80%99t-pay-for-themselves/ http://usa.streetsblog.org/2011/01/04/actually-highway-build...
  - AnthonyMouse 9y ago
    Numbers like that are misleading. Roads that go through rural areas don't pay for themselves because they have little traffic. But those are also not the areas where anybody is talking about adding lanes to the roads. And in the areas with actual congestion, tax on the gas burned driving on those roads more than pays for them.
    - grardb 9y ago
      If we're playing this game, we could go a step further than that and say that roads with little traffic need little maintenance. Roads with more driving will need to maintained on a more regular basis. If someone has data/knowledge that this isn't true, though, please let me know (genuinely, as I can't find any information about this). Also, for the record, adding lanes doesn't reduce traffic congestion[1]. Not sure if you were saying that. Even if we did "profit" from building more lanes/roads, it's only because we're externalizing other costs (environmental damage, the cost of space/real estate, etc.). I don't think this is a good strategy. [1] https://www.wired.com/2014/06/wuwt-traffic-induced-demand https://www.wired.com/2014/06/wuwt-traffic-induced-demand

JackFr 9y ago

> as rider's fares typically pay for less than half the cost of running the bus/subway/light rail system. as drivers pay for none of the cost of maintaining the roads.

turc1656 9y ago
That's precisely what the gas tax is supposed to fund. All drivers who purchase gas help pay for road maintenance.

deleted 9y ago

[deleted]

TulliusCicero 9y ago

The difference is that cars have way more externalities than transit does. Pollution, noise, danger to others, space taken, cars are way worse at all of these. Cities quite rationally want people to walk and use transit more, because those modes fit the fabric of a city better. Of course you'll still need car trips for some things, but a blanket subsidy like this for something you want less of is nonsense.

grardb 9y ago

I feel like this is almost an apples-to-oranges comparison. Yes, public transit "competes" with cars, but... Is the government subsidizing something run by the government really "subsidization?" It may be federal vs state/city, sure, but I don't see this as being a problem, especially since public transportation is beneficial in so many ways (costs people less money than car ownership, less harmful on the environment, less harmful to health, etc.). I do, however, see it as a problem when the federal government subsidizes private transportation, which is objectively harmful to cities (and most things in general, really). > rider's fares typically pay for less than half the cost of running the bus/subway/light rail system Let's not forget that drivers also only pay for half of the cost of roads[1]. If we're only going to pay for a portion of something, I think it should be public transportation. In my mind, the whole point of the government is to provide us with services. Providing us with transit makes sense. Providing us with spaces that we can only use if we pay a bunch of money to private corporations (car manufacturer + oil companies mainly) to buy large, dangerous, private, pollution-creating machines? I'm opposed to that. [1] http://usa.streetsblog.org/2013/01/23/drivers-cover-just-51-percent-of-u-s-road-spending/ http://usa.streetsblog.org/2013/01/23/drivers-cover-just-51-...

AnthonyMouse 9y ago
> Is the government subsidizing something run by the government really "subsidization?" Yes. Having the government do anything with public money is subsidization. But it often makes sense to do things like that, especially in areas where there is a large up front cost to build something and thereafter the cost per use is negligible. It makes sense for the government to build subways in cities and then charge zero dollars to riders, because everyone benefits from their existence (even non-riders, like stores whose customers arrive on the subway) and once the construction cost is paid it makes no sense to discourage use of the sunk-cost infrastructure by charging fares. And fare collection is inefficient because a nontrivial proportion of the fares are spent collecting them. But it also makes sense to do the same thing for roads for the same reasons. The real question is where and when to subsidize each. It makes no sense to build subways in rural Kansas that no one would ride, or new roads in Manhattan. When you see traffic congestion, the question is how to most effectively eliminate it. Sometimes that means improving mass transit so less people have to drive. Sometimes it's more cost effective to just add a lane to the road. Sometimes the underlying problem is that real estate prices are too high causing people to have to commute too far and the only real answer is to build new housing.

danans 9y ago

Car drivers impose a large externalized cost upon any city, from traffic and congestion, to local pollution and its health consequences, to increased accident rates. We've gotten used to those costs, and to the degree that we are even aware of them, we've accepted them as the price of our convenience. Transit systems do not impose such high externalized costs per commuter moved, but no doubt they are less convenient for individuals.

pavel_lishin 9y ago
> no doubt they are less convenient for individuals. It depends; in New York, it would be incredibly inconvenient for me to own a car to go from our apartment in upper manhattan to my job in midtown.
- danans 9y ago
  Same for me with BART to downtown SF but I also think I'm incredibly lucky to be in the situation where mass transit is the most convenient option.
autokad 9y ago
if people couldn't drive to your cities, your city would become an abandoned wasteland of crowded concrete and glass. people like you have gotten use to enjoying all the tax and revenues from people who do not think like you, like use a car, but become unaware its subsidizing your amenities (such as mass transit).

bryanlarsen 9y ago

Public transit is a road subsidy. Transit provides 23% or the transportation in San Francisco in a lot less than 23% of the space. If that was to disappear, SF would need 50% more road space for a similar level of congestion. That would cost a lot more than $1 billion.