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Using tax to change people's travel habits
IN Europe and North America tax incentives are gaining popularity as a way to encourage more people to change their mode of travel.
Some schemes are being promoted directly by governments while others encourage private industry to arrange salary sacrifice packages for the annual purchase in 12 monthly instalments of a bus or rail pass.
In fact there are now so many transit tax schemes that in the name of equity, the US in January began offering monthly $US20 tax-free reimbursement so that people cycling to work could cover their bike expenses.
The initial transit schemes seem to have originated as a way to ease congestion and reduce pressure on oil imports, but now with oil prices falling the emphasis appears to be on encouraging people not to switch back to their cars for their daily commute.
In Britain bus operator Arriva is packaging a salary-sacrificed annual ticket that offers staff of participating companies savings of up to 41% on their fares.
In the US, San Francisco now requires any company employing 20 or more people to offer “transit benefit programs”. That usually involves using federal tax laws so that an employee can set aside $US1380 a year in pre-tax dollars to help pay for commuting expenses. But added to that, companies can contribute up to $US115 a month in tax-free benefits for transit costs and claim the money back as a payroll-tax deduction.
But why stop incentives there? One columnist for a Connecticut newspaper is suggesting that parking incentives be offered to those motorists who carry one passenger or more to a “park-and-ride” railway car park.
