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I've never understood this line of reasoning. You don't object to sales tax per se, you just prefer that it be hidden from you? (Ie, included in the sticker pri
by sigil 9y ago
I've never understood this line of reasoning. You don't object to sales tax per se, you just prefer that it be hidden from you? (Ie, included in the sticker price.) But later you object to hidden fees in the context of major purchases.
Which is it -- should taxes be visible or invisible? Does the visibility of the tax matter more than the amount of the tax?
The strong preference for highly visible taxation might be a uniquely American thing. Most Americans probably know their effective state & local sales tax rate to within a whole percentage, since it's a separate line item on literally every transaction they engage in. Where I live total sales tax is about 7%; the highest that total sales tax rates reach in America is about 10%. (For comparison, sales tax in Germany is 19%). In my hometown, a proposal to increase local sales tax by even 1/10th of a cent is accompanied by vigorous public debate, and often enough fails to pass. People pay close attention to these things.
Where we seem to agree: lots of hidden fees and upcharges are a consumer UX problem, and they result in confusion and frustration. Anecdotally it seems the most regulated industries (air travel, internet service, phone service, public utilities) are the worst offenders.
- dragonwriter 9y ago> I've never understood this line of reasoning. You don't object to sales tax per se, you just prefer that it be hidden from you? (Ie, included in the sticker price.) But later you object to hidden fees in the context of major purchases. Those are consistent. "Hidden Fees" is the common term for fees which are required but not disclosed as part of the advertised price; they are part of advertising a price that is lower than what you actually must pay for the good or service. Sales taxes that are not included in marked prices are a form of hidden fee, and reduce the visibility of prices.
- sigil 9y agoOkay, there's some disagreement about terminology here. Does "hidden" refer to a tax or fee rolled into the price? Or does "hidden" mean "only visible later, at checkout?" Guess it depends on whether you're talking about tax being hidden, or total price being hidden. > Sales taxes that are not included in marked prices are a form of hidden fee, and reduce the visibility of prices. No disagreement there. Separate sales tax makes every price a computation, and the local optimization is to remove all that computational overhead. I'm not sure the local optimum of invisible tax is a global optimum, however. General public awareness of taxation might be worth the cost in the long run.
- shakna 9y ago> . I'm not sure the local optimum of invisible tax is a global optimum, It's not invisible. For example, here's an item from a menu in Australia: $1.95, includes 10% GST. You get the total final cost, as well as the tax breakdown.
- gozur88 9y agoThe worst offenders are hotels. As a rule of thumb, what you end up paying for a hotel in the US is about double the quoted price, mostly because of taxes. The hotel chains take advantage, too, by adding "surcharges" that read like taxes but are in fact just part of the hotel's price. When I was vacationing in Germany I expected the same sort of thing and was pleasantly surprised to find I'd budgeted twice as much for lodging as I needed.
- dragonwriter 9y ago> The worst offenders are hotels Hotels and airlines are both pretty bad, for the same reasons: both are optimizing for channels that make comparing the base price easy, and so are motivated to maximize hidden fees and separate charges for expected features.