Effective Jan. 1, people who use bicycles as their primary means of getting to work will be eligible to get up to $20 a month in tax-free payments from their employers for the costs of owning and operating a bike. Employers can deduct the payments as an expense from their federal taxes.
Bike enthusiasts in Congress had tried to pass the tax benefit for bicyclists for several years, but were unable to win approval from the Senate until negotiations over the bailout package approved earlier this month.
"What this does is to legitimize commuting by bicycle," said Robert Rayburn, director of the East Bay Bicycle Coalition. "We've already seen a swelling of bicycling commuters on account of the rising gas prices. Until this change in the tax code, bike commuters have been denied a benefit that public transit riders get." ( Read more.)
Last week President Bush signed the rush-job Emergency Economic Stabilization Act, better known as the hasty $700 billion Wall Street bailout. And now the details of this panic measure are being revealed, with the media giving necessary attention to the worthy if modest benefits granted bicycle commuters.
The act changes the tax-code, effective in January, allowing companies to give up to $20 a month to workers who pedal to work, which the employees could use for tires, lights, helmets, locker rental fees, or shower access at a gym. It would be tax-free to cycling commuters, and a tax write-off for employers.
Expressing a sentiment felt by many bicycle commuters, Walt Seifert, executive director of Sacramento Area Bicycle Advocates, told the Sacramento Bee: "It's about time. I hope employers jump on the chance to offer it." Jonathan Maus, editor of BikePortland.org, told the New York Times: "It’s a pretty small victory. But this gives a lot of people around the country the ability to walk into their human resources office or their manager’s office and ask for the credit. It helps move the conversation forward."
The media coverage is welcome, because as Maus indicates, the measure only provides an opportunity for an employer tax benefit. It is still up to employers to implement the subsidy, and bicycle commuting employees to demand it. Raising awareness of the measure's benefits to bicycle commuters is critical. As gas prices continue to increase, a $20 monthly incentive is an appealing additional inducement to potential bicycle commuters.
Beyond expensive gas, Americans will be further pinched in future years by collapsing home values, a weaker dollar, diminished retirement accounts, and anxiety about employment. Saving money on transportation will become a big imperative in many households, meaning bicycle commuting will only be more attractive.
Instead of bailing out greedy, irresponsible, and reckless bankers, I wish the Feds had invested in job-creating public works projects, such as transit, pedestrian, and bicycling infrastructure. More bicycle commuters will only mean increased crowding at bike racks and lockers, on the bike trails, on trains and buses. We need more public investment in sustainable transportation. Now.