Fair Subsidies

The New York Times weighs in on the proposed fare increase for New York’s transit system. They suggest that the state and local government pump more money into the transit system to keep the fare increase to a minimum using a very common rationale for low-cost public transit

Keeping fares affordable is critical in a city where so many riders have low incomes.

However, New York City public transit is as close to an egalitarian public transit system as you will find (certain exceptions not withstanding). Using fares to subsidize the poor will also subsidize rich New York investment bankers who take the subway along side them. An alternative proposal to keep the costs down for the poor is to give them a tax credit for their public transit monthly passes (as tried in Canada, albeit without any income criteria for credit claimants). At least the NYT acknowledge the role of congestion pricing as the long term solution to New York’s traffic problems.

Ben Dachis is a policy analyst at Reason Foundation, a nonprofit think tank advancing free minds and free markets. His research involves aviation, airport, urban land use and transportation economics and privatization.