The Power of Getting Paid Not to Park at Work
Subsidizing employer-paid parking clogs streets, boosts emissions and isn’t fair to commuters who can’t use this perk. But there’s an easy way to fix it.
Free parking at the office is a popular work perk. But is it fair?
Photographer: Bing Guan/Bloomberg
Cities, states and the federal government are trying to reduce traffic congestion, air pollution and carbon emissions, but a Catch-22 in the federal tax code works against these goals. The income tax exemption for employer-paid parking subsidizes solo driving to work, which helps explain why 81% of American commuters drive to work alone.
The tax exemption for employer-paid parking creates three big problems. First, free parking at work increases the number of cars driven to work by about a third, mostly at peak hours. Second, higher-income commuters are more likely to get tax-exempt parking subsidies. The tax exemption is also worth nothing to the 44% of American households who pay no income tax because of their low incomes. Third, free parking doesn’t help transit riders, who are disproportionately communities of color. In Los Angeles, for example, 92% of Metro riders are people of color.