Unintended consequences are an all-too-familiar aspect of tax laws, but it’s not often that they’re suspected of playing a role in a disaster of the magnitude of Monday’s Washington Metro train crash, in which nine people died. Legal blogger Sarah Lawsky drew attention to a possible tax connection in a post to Concurring Opinions this week.

Lawsky noted that in response to recommendations from the National Transportation Safety Board that it should upgrade the crashworthiness of its cars, the Metro claimed to be “constrained by tax advantage leases which require that WMATA [Washington Metropolitan Area Transit Authority] keep the 1000-Series cars in service at least until the end of 2014.”

These “tax advantage leases” are nothing more than standard sale-leaseback transactions, Lawsky believes, “in which WMATA sold equipment, including train cars, to another party and now leases it back. The other party gets various tax advantages (depreciation, credits, and so forth) associated with owning the equipment, and WMATA — which, as a tax-exempt organization, cannot use these advantages — gets cash. But apparently the leases did not include language that permits WMATA to break the leases if newer, safer equipment comes along.”

The latest reports from the crash investigation seem to be pointing away from the train cars themselves and toward failures of critical circuits in the rails. But that doesn’t diminish the impact of Lawsky’s point. It’s profoundly disturbing that the Transit Authority should be “constrained” by leases that were shaped in part by tax considerations and which “required” the organization to set aside what should be its first concern — the safety of its passengers. ###