How does the the ½-cent sales tax benefit low income transit riders?
Let’s consider the half-cent sales tax, in the context the cost of driving a car. Increased investment in public transit will provide a transportation option for many low and moderate income families that current have very limited alternatives to the expensive cost of fuel and vehicle maintenance.
Table One: Cost of Public Transit vs. Personal Automobile
|Household Income (Range)||Annual cost of Public Transit*||Annual Transit Cost as a % Of Income||Annual Auto Maintenance Costs (Including Fuel)**||Annual Auto Maintenance Cost as a % Of Income|
*Includes cost of 1/2 cents sales tax; assumes no public subsidy to offset transit expense.
**Total annual maintenance costs are based on 2008 IRS rate if 50.5 cents per mile.
For low and moderate income families, using public transit is much less expensive as a percentage of their income than using a car. More importantly, this table also shows that low and moderate income families benefit to a much greater extent from having public transit options.
For the transit sales tax under consideration, food, medicine, utilities and housing are not taxed.