Higher Gas Prices Lead to
Greater Use of Mass Transit
Higher gas prices have fueled a significant increase in the use of public
transportation, according to the American Public Transportation Association (APTA).
During the first 3 months of 2008, Americans took 2.6 billion trips on public
transportation--an increase of 85 million compared to the same time period in
2007, according to the organization.
"There's no doubt that the high gas prices are motivating people to change their
travel behavior," says William W. Millar, president of APTA. "More and more
people have decided that taking public transportation is the quickest way to
beat the high gas prices."
Employer incentives to use mass transit not only help lighten the burden of high
gas prices, they also are good for the environment and beneficial to employees
and employers from a tax standpoint. Under federal law, employers may exclude
qualified transportation fringe benefits from an employee's wages--up to certain
For 2008, employers can exclude up to $115 per month for combined commuter
highway vehicle transportation and transit passes, according to IRS.
Employers also may offer employees the option of paying for up to $115 per month
in commuting costs through pre-tax payroll deductions, APTA states in its
brochure about the tax advantages of providing transit commuter benefits.
"Alternatively, employers can share these costs with their workers by paying
part of their monthly commuting costs and letting workers pay the balance using
APTA points out that
"employers can deduct their costs for providing such benefits." In addition,
qualified transportation benefits are not subject to social security, Medicare,
or federal unemployment taxes, according to the IRS.