The Resource Employer-provided benefits and the environment : transit passes and parking

Employer-provided benefits and the environment : transit passes and parking

Label
Employer-provided benefits and the environment : transit passes and parking
Title
Employer-provided benefits and the environment : transit passes and parking
Creator
Subject
Language
eng
Summary
Municipal transit and environmental organizations have advocated making employerprovided transit passes a non-taxable benefit. They argue that this would produce environmental benefits by encouraging commuters to shift from personal vehicles to public transit. They also argue that a tax exemption for transit passes would counteract the systemic undertaxation of employer-provided parking, which is in principle a taxable benefit but is rarely included in employees' taxable income. A related Conservative Party proposal was an issue in the 2006 federal election campaign. This article offers an analysis of the transit pass proposal, applying both traditional tax policy criteria (such as horizontal equity, neutrality, and administrative convenience and simplicity) and criteria appropriate for evaluating a deliberate tax incentive (such as the degree of change in behaviour induced relative to the cost and whether the policy problem is better addressed through a direct spending program). The conclusion is that "two wrongs don't make a right", and the "wrong" of the current undertaxation of employer-provided parking is fixable. Proposals include reforming Canada Revenue Agency administrative structures for employee benefits and legislating more easily enforceable rules for the taxation of parking, possibly based on the Australian model. This approach would eliminate the existing horizontal inequity without creating others, raise revenue, and permit a "double dividend" in that the funds raised could be used to finance other environmental initiatives; at the same time, by discouraging employees from driving to work, it would produce environmental benefits similar to those associated with a tax exemption for employer-provided transit passes
Citation source
In: Canadian tax journal = Revue fiscale canadienne. - Toronto. - Vol. 54 (2006),
http://library.link/vocab/creatorName
Di Domenico, A
Geographic coverage
North America
Language note
English
http://library.link/vocab/subjectName
  • environmental incentive
  • commuter allowance
  • exemption
  • fringe benefits
  • tax expenditure
  • car
Label
Employer-provided benefits and the environment : transit passes and parking
Instantiates
Publication
Label
Employer-provided benefits and the environment : transit passes and parking
Publication

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