Did you get your check? I sure didn’t.
This article explains it all. They don’t mean the government actually sends out money (like they do for farmers or education) but the subsidy comes as a tax break for parking expenses. IE, when you drive to work and pay say $200 a month for parking, that can be written off your taxes. It’s like your mortgage interest. The fact that you can write it off means that the government is subsidizing the purchase of your house.
Think of it this way – If you pay 25% of your income in federal taxes, and you can write off $200 a month in parking fees, it means that the government is actually paying you $50 a month to help cover your parking costs – that’s a subsidy.
What is interesting is that the IRS only allows you to write off $100 in transportation costs (fares for busses or trains). And I thought that they wanted to urge people out of cars and on to rapid transit. These tax laws don’t seem to do that.
However, the wizards in Congress are attempting to fix that. They are going to set a “maximum” you can write off of $230 a month total for both.. Prior to that it was $100 for transportation and $200 for Parking. Of course they want to reduce the “subsidy” not increase it.
This seems a tad unfair to me. If I live in New York City, $200 doesn’t cover my parking costs. However in Des Moines, much of the subsidy goes to waste. So by the fact of my geographic location, the government subsidizes my parking and transportation more or less.
All of this doesn’t seem to make a lot of sense. If I live in Des Moines and make $90,000 a year I pay the same amount of Federal Taxes as the poor soul who makes the same in New York. However they get more of a subsidy in parking and transportation than I do. And of course this only works for those who actually pay taxes. If I make less than what, $40K and have a bunch of kids, I don’t even pay taxes. So the subsidy only works for those who really don’t need it.
Confused? I know I am. As usual the law of unintended consequences kicks in and the folks with the bucks get the breaks and those without get it in the neck.
Fair. I don’t think so.
JVH
