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The iPhone 6 lists at 459 British pounds which even with the historically low exchange rate is still $100 premium over the US version. Ditto the euro, Australia

The iPhone 6 lists at 459 British pounds which even with the historically low exchange rate is still $100 premium over the US version. Ditto the euro, Australian dollar, etc. It's not such a surprise that they were able to make loads of $$ in foreign markets back when the exchange rates vs USD were much less even.

TazeTSchnitzel 11y ago
US shelf prices don't include the sales tax, but UK prices for consumers include VAT. At the current VAT rate of 20%, that's 16⅔% of the price, or about £76.50, which in US currency is… $109. The entire price difference is VAT.
- lostlogin 11y ago
  This is such a horror when shopping in the US. Why bother putting a price tag on things when the price you pay is different. How would a tourist know what the tax is when it changes multiple times over a car journey? It seems archaic.
  - dogma1138 11y ago
    Because it's the right thing to do you know exactly what you pay in tax which means you are more likely to hold the government accountable for that money as well as being able to actually lobby for lower taxation. Since sales tax is applied on both state and local government levels it also simplifies pricing both nation wide and even state wide. Walmart for example sets a price for product A that price is the same across all states (for this example I don't know if Walmart has regional prices to adjust for cost of living but I don't think so). 45 states have sales taxes these come at different rates, about 40 states also allow for local sale taxes meaning that local county can set up it's own additional sales tax this means that the end price is different between states and even within states with local sales tax collection. As a consumer you know exactly what you are paying if the product costs 100$ then you pay 100$ for that product and you pay additional tax for the sale when you know your state taxes you 8% and your local county taxes you additional 4% you can hold them responsible for what your taxes are being used for, you can lobby for lower sale taxes and you can always move to a jurisdiction with lower sales tax. The way the sales tax is collected also allows for more convenient exemption from sales tax especially in non B2B purchases a sales tax exemption certificate can be filled at any purchase and they will not charge you sales tax. You can literally go online print the exemption certificate for your state e.g. http://www.tax.ohio.gov/portals/0/forms/fill-in/sales_and_use/exemption_certificates/ST_STEC_B_FI.pdf http://www.tax.ohio.gov/portals/0/forms/fill-in/sales_and_us... go to a shop pay the sticker price and fill it out and the store will not collect the sales tax on that sale. Compared to how annoying it is to get VAT refunded and just how many caveats there are for getting your VAT back it's 100 times better.
    - madeofpalk 11y ago
      I get how it would be extremely difficult for the US to have the true pricing on items, with sales tax being different even within the same state!!! In countries, where sales tax is federal and it's a flat 10% everywhere, I'm eternally grateful that I don't have to do mental gymnastics to figure how how much something will actually cost.
      - dogma1138 11y ago
        There aren't that many countries with sales tax, most of them use VAT which is considerably worse than sales tax as far as tax burden distribution goes. VAT is added to the price of the goods and is an intrinsic part of their price which means when they are resold VAT affects the final resell price even tho it's only collected on the initial sale. Say a car costs 50K, US uses sales tax Atlantia uses VAT both countries tax at 10% in the US one buys a car pays 50K for the car and 5K in additional sales taxes, a person in Atlantia pays 55K "sticker price" which includes VAT both paid 55K. Both of them decide to sell the car after 2 years the resell price in both countries is calculated based on 50% of the original sticker price so in the US the car is sold for 25K and in Atlantia the car is sold for 27.5K. Additionally since sales tax in most us states (iirc all but like 2 or 3) is only applied to tangible goods this means that most services tend also be considerably cheaper to the end consumer than in countries with VAT/GST.
        madeofpalk 11y ago
        That situation has never really affected me - but then the most expensive thing I've resold is my Macbook. But when I'm reselling something, I'm looking to capture as much as my cost (how much I paid for it) as possible, including the GST. You could even consider this that I'm just a middleman who is passing on the GST to the 'end consumer'.

TazeTSchnitzel 11y ago

US shelf prices don't include the sales tax, but UK prices for consumers include VAT. At the current VAT rate of 20%, that's 16⅔% of the price, or about £76.50, which in US currency is… $109. The entire price difference is VAT.

lostlogin 11y ago
This is such a horror when shopping in the US. Why bother putting a price tag on things when the price you pay is different. How would a tourist know what the tax is when it changes multiple times over a car journey? It seems archaic.
- dogma1138 11y ago
  Because it's the right thing to do you know exactly what you pay in tax which means you are more likely to hold the government accountable for that money as well as being able to actually lobby for lower taxation. Since sales tax is applied on both state and local government levels it also simplifies pricing both nation wide and even state wide. Walmart for example sets a price for product A that price is the same across all states (for this example I don't know if Walmart has regional prices to adjust for cost of living but I don't think so). 45 states have sales taxes these come at different rates, about 40 states also allow for local sale taxes meaning that local county can set up it's own additional sales tax this means that the end price is different between states and even within states with local sales tax collection. As a consumer you know exactly what you are paying if the product costs 100$ then you pay 100$ for that product and you pay additional tax for the sale when you know your state taxes you 8% and your local county taxes you additional 4% you can hold them responsible for what your taxes are being used for, you can lobby for lower sale taxes and you can always move to a jurisdiction with lower sales tax. The way the sales tax is collected also allows for more convenient exemption from sales tax especially in non B2B purchases a sales tax exemption certificate can be filled at any purchase and they will not charge you sales tax. You can literally go online print the exemption certificate for your state e.g. http://www.tax.ohio.gov/portals/0/forms/fill-in/sales_and_use/exemption_certificates/ST_STEC_B_FI.pdf http://www.tax.ohio.gov/portals/0/forms/fill-in/sales_and_us... go to a shop pay the sticker price and fill it out and the store will not collect the sales tax on that sale. Compared to how annoying it is to get VAT refunded and just how many caveats there are for getting your VAT back it's 100 times better.
  - madeofpalk 11y ago
    I get how it would be extremely difficult for the US to have the true pricing on items, with sales tax being different even within the same state!!! In countries, where sales tax is federal and it's a flat 10% everywhere, I'm eternally grateful that I don't have to do mental gymnastics to figure how how much something will actually cost.
    - dogma1138 11y ago
      There aren't that many countries with sales tax, most of them use VAT which is considerably worse than sales tax as far as tax burden distribution goes. VAT is added to the price of the goods and is an intrinsic part of their price which means when they are resold VAT affects the final resell price even tho it's only collected on the initial sale. Say a car costs 50K, US uses sales tax Atlantia uses VAT both countries tax at 10% in the US one buys a car pays 50K for the car and 5K in additional sales taxes, a person in Atlantia pays 55K "sticker price" which includes VAT both paid 55K. Both of them decide to sell the car after 2 years the resell price in both countries is calculated based on 50% of the original sticker price so in the US the car is sold for 25K and in Atlantia the car is sold for 27.5K. Additionally since sales tax in most us states (iirc all but like 2 or 3) is only applied to tangible goods this means that most services tend also be considerably cheaper to the end consumer than in countries with VAT/GST.
      - madeofpalk 11y ago
        That situation has never really affected me - but then the most expensive thing I've resold is my Macbook. But when I'm reselling something, I'm looking to capture as much as my cost (how much I paid for it) as possible, including the GST. You could even consider this that I'm just a middleman who is passing on the GST to the 'end consumer'.