NY lawmaker proposes US$3 online delivery tax to fund public transport

Brooklyn Assemblyman Robert Carroll has suggested a new way to help fund New York’s Metropolitan Transportation Authority – a US$3 surcharge for online deliveries of goods, excluding food and medicine.

Carroll, who has put forward Bill A06078B, says the measure could raise US$1 billion  a year for the MTA as well as encouraging more New York residents to shop locally and nudging consumers and delivery companies to consolidate multiple items into a single package for delivery

The revenue generated would be used to fund the operating costs of buses and subways in the city of New York.

The MTA is facing a US$16.2 billion deficit to 2024, following a huge drop in ridership during the pandemic, and has called for US$12 billion in federal support to help it get through 2021. The agency has warned that it could be forced to reduce subway services by as much as 40 percent and bus services by a third without financial help. Many other US transportation agencies are also facing dire outlooks.

In a New York Daily News op-ed this week with co-author John Samuelsen, International President, Transport Workers Union, Carroll agreed that a government bailout  is urgently needed but said the bus and subway system will still need “more than a one-shot infusion of federal money,” noting that the “MTA was projecting operating budget deficits even before the pandemic.” He urged the state to support ways to create new and recurring revenues.

Delivery boom

Carroll and Samuelsen wrote: “Shopping online is cheap and convenient. It also means more trucks clogging city traffic, slowing buses, and spewing pollution, all of which have costs of their own.

“The delivery siege will only get worse. Online commerce is booming. Amazon’s profits are up 53 percent compared to last year.”

The idea drew some swift criticism, though, with Rep. Alexandria Ocasio-Cortez tweeting: “Maybe instead of taxing people who need baby formula and essential goods, we tax those who have profited billions from a global pandemic?” Carroll reiterated that essential items would be exempt and said he is also the sponsor or co-sponsor of several other bills for taxes on the wealthy.

FYI I drafted the bill to tax @Amazon too. It’s called the alternative minimum corporate income tax. We should tax Amazon, the rich and do my nonessential online delivery surcharge. I am also the co-sponsor of the billionaires, millionaires, Pied-à-Terre, &stock transfer tax.

— Assemblymember Robert Carroll (@Bobby4Brooklyn) December 8, 2020

Others noted that online shopping has been essential for many during the pandemic, including people with disabilities and older citizens, and that the surcharge could disadvantage them.

Governor Andrew Cuomo’s office will review the Bill.

A January World Economic Forum report forecast that the number of delivery vehicles in the world’s 100 largest cities will increase 36 percent by 2030, resulting in a 32 percent rise in emissions from delivery traffic and a 21 percent increase in congestion. Since then, online shopping and food deliveries have surged during the COVID-19 pandemic and could change logistics trends in the longer term.