February 17, 2005

TransitCheck Charging 4%+$12 Fee

I have just filled out an order form for TransitChecks. TransitChecks allow emloyees to buy subway fares "with pre-tax earnings". According to the FAQ, that includes savings on Federal+State+City taxes, but I will check this claim once I do the taxes.

TransitCenter, Inc. (a non-profit organization) is administering the program and charging 4% + $12 processing fee twice a year. That is 2 x $12 + 4% x 2 x $600 = $72/year, which is about one month worth of commuting. Why should I pay the fee? If I bought the MetroCards at the vending machine, MTA would have to pay for the credit card processing and for the maintainance of the machine.

Here is how I see it:

  • MTA gets the price of the full fare from TransitCenter, but saves on processing expenses.
  • TransitCenter gets the processing fee, or about $72/year/purchaser
  • The purchaser (that is me) saves on the taxes - hopefully at least $72 being overpaid.
  • New York City gets screwed by the amount I save on taxes.

If the things work the way they usually work, the government and the taxpayer carry the burden, TransitCenter and MTA get the profit, and the mayor gets the kickbacks.

Somebody, please correct me if I am wrong.

Posted by laza at February 17, 2005 12:48 PM | TrackBack
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