Commuter tax

A commuter tax is a tax (generally on either income or wages) levied upon persons who work in a jurisdiction, but who do not live (are not domiciled) in that jurisdiction. For example, Philadelphia has a 3.928% wage tax on residents and a 3.4985% tax on non-residents for wages earned in the city as of July 2010.^[1]

The argument for a commuter tax is that it pays for public services, such as police, fire, sanitation, etc., received by and beneficial to people who work within the jurisdiction levying the commuter tax. Arguments against such a tax are that it acts as an incentive for businesses to relocate outside of the jurisdiction, along with their residents.^[2]

Until 1999, New York City had a commuter tax, and there are periodic calls for its reinstatement.^[3][4] A commuter tax in New York City would have to have support from the State Legislature in order for reinstatement, and since the majority of state legislators represent people who do not live in New York City, the tax tends to be unpopular.^[5] In 2009, New York enacted the Metropolitan Commuter Transportation Mobility Tax, a 0.34% levy on payrolls and self-employment earnings in New York City and Nassau, Suffolk, Westchester, Rockland, Putnam, and Dutchess counties. This tax, known popularly as the "mobility tax," is not a commuter tax, but is intended to provide funds for the Metropolitan Transportation Authority, which transports many of the region's commuters.^[6]

The city of Washington, DC, has sought to enact a commuter tax to recover costs of providing city services to the approximately 300,000 people who commute to the city from suburban Maryland and Virginia. However, the U.S. Congress barred the city from enacting such a tax in the 1973 District of Columbia Home Rule Act.^[7]

See also

• Employer transportation benefits in the United States
• Income tax
• Payroll tax
• Wheel tax

References

1. ^ "Philadelphia Department of Revenue". http://www.phila.gov/revenue/Earnings_Tax.html. Retrieved 2010-08-29. 
2. ^ Gessing, Paul (2003-06-18). "Commuter Taxes: Milking Outsiders for All They're Worth". NTUF Policy Paper 141. Archived from the original on 2007-09-28. http://web.archive.org/web/20070928005751/http://www.ntu.org/main/press_papers.php?PressID=148&org_name=NTUF. Retrieved 2008-03-13. 
3. ^ McMahon, E.J.. "Wrong Time For A Commuter Tax". http://www.manhattan-institute.org/html/_nypost-wrong_time.htm. Retrieved 2008-03-13. 
4. ^ Moynihan, Colin (2008-11-23). "Proposal to Raise Car Fees". The New York Times. http://www.nytimes.com/2008/11/24/nyregion/24mta.html?_r=1&scp=1&sq=%22the%20new%20york%20city%20comptroller%22&st=cse. Retrieved 2010-04-30. 
5. ^ "The Commuter's Fair Share". The New York Times. 2002-12-09. http://query.nytimes.com/gst/fullpage.html?res=9404EEDB1F3BF93AA35751C1A9649C8B63. Retrieved 2008-03-13. 
6. ^ "Metropolitan Commuter Transportation Mobility Tax", Weiser Tax, May 2009, http://www.mrweiser.com/SiteObjects/1B0BC596BF2601E94C167813D55BB623/Weiser%20Tax_Metropolitan%20Commuter%20Transportation%20Mobility%20Tax.pdf 
7. ^ Eric M. Weiss, D.C.'s Bid To Impose Commuter Tax Denied, Washington Post, Saturday, November 5, 2005; Page A01