THE USE OF TAX INCENTIVES FOR PUBLIC TRANSIT AS A SUBSIDY ALTERNATIVE

The objective of this paper is to propose a positive means of encouraging the use of public transit, through the creation and utilization of incentives aimed at stimulating demand. A tax incentive is proposed and examined as a form of revenue source subsidy which can be coupled with a congestion tolllgasoline tax policy to accomplish this demand stimulation, and is examined in light of the associated public policy issues. Taken into account are the typology of subsidy, the justification for subsidy, the sources of subsidy and the impact of different types of subsidy on economic factors, such as price and cost. Copyright 1986 by The Policy Studies Organization.