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It's insisted upon by anti-tax advocates, so that Americans always get reminded about exactly how much the government is adding onto the price. Otherwise, the t

It's insisted upon by anti-tax advocates, so that Americans always get reminded about exactly how much the government is adding onto the price. Otherwise, the theory goes, we would get too happy about taxes.

mandelbrotwurst 6y ago
Being in favor of transparency in taxation isn't the same as being "anti-tax".
donarb 6y ago
That happened in Washington state when Costco sponsored a privatization initiative to allow liquor to be sold by private stores and abolish the state stores. The private stores started advertising the non-tax price with tiny print saying that tax would be added at the register (when the state sold liquor, the price on the shelf included all liquor taxes). People were pissed thinking that the state had been ripping them off until they got to the register and found that the price was pretty much what they paid before. Actually they were paying a bit more, most people didn't read the initiative before voting on it. Now the stores print the total price in their advertisements.
- Aloha 6y ago
  the bigger reason people voted to change that was to expand hours of access - and selection, which were pretty limited before.
thekyle 6y ago
Maybe I'm wrong, but I don't think there is any law that says businesses have to add sales tax on separately. Since it's the business who actually pays the tax not the consumer they could just take it out of their own profits. However, the reason I think stores do this is: If store A is selling candy bars for $1 (+ $0.05 tax at register) and store B is selling candy bars for $1.05. Most people would buy their candy from store A because their prices are lower.
- roywiggins 6y ago
  Sometimes stores will structure sales that way ("we pay the sales tax" sales), so I expect you're right. The situation where it comes up is the idea of an American VAT. Because it applies the tax before the store even sees the good, the tax ends up baked into the price. And people like Grover Norquist have argued against a VAT specifically because of that: "The VAT is embedded inside the price of a good (as opposed to the U.S., where sales tax is transparent and on top of the price). As such, people forget they pay it, and European governments have found it too easy to raise the tax repeatedly over time." https://humanevents.com/2010/04/23/dont-give-obama-a-vat/ https://humanevents.com/2010/04/23/dont-give-obama-a-vat/
  - Entalpi 6y ago
    I love how the argument being played is that VAT is used to fed a big government. Like the US is huge, it requires a large government..
- syshum 6y ago
  Business collect and remit taxation on behalf of the customer, so no the business is not "paying" the taxes. It is the consumer that owes them the business is just collecting them for the government. For which the business gets a small fee to do this service for the government. If the business did not collect taxes then you the customer owe that to the state still and are suppose to self report that and pay the owed taxed annually This is the same as Tax withholding from a paycheck, you owe the taxes but your employer is collecting and forwarding them to the government on your behalf, the big difference here is the purchases are not tracked by individual tax payer
  - thekyle 6y ago
    > If the business did not collect taxes then you the customer owe that to the state still and are suppose to self report that and pay the owed taxed annually Interesting. But do people actually do this in practice? I wonder if states report what percentage of sales tax comes from businesses vs individuals.

mandelbrotwurst 6y ago

Being in favor of transparency in taxation isn't the same as being "anti-tax".

donarb 6y ago

That happened in Washington state when Costco sponsored a privatization initiative to allow liquor to be sold by private stores and abolish the state stores. The private stores started advertising the non-tax price with tiny print saying that tax would be added at the register (when the state sold liquor, the price on the shelf included all liquor taxes). People were pissed thinking that the state had been ripping them off until they got to the register and found that the price was pretty much what they paid before. Actually they were paying a bit more, most people didn't read the initiative before voting on it. Now the stores print the total price in their advertisements.

Aloha 6y ago
the bigger reason people voted to change that was to expand hours of access - and selection, which were pretty limited before.

thekyle 6y ago

Maybe I'm wrong, but I don't think there is any law that says businesses have to add sales tax on separately. Since it's the business who actually pays the tax not the consumer they could just take it out of their own profits. However, the reason I think stores do this is: If store A is selling candy bars for $1 (+ $0.05 tax at register) and store B is selling candy bars for $1.05. Most people would buy their candy from store A because their prices are lower.

roywiggins 6y ago
Sometimes stores will structure sales that way ("we pay the sales tax" sales), so I expect you're right. The situation where it comes up is the idea of an American VAT. Because it applies the tax before the store even sees the good, the tax ends up baked into the price. And people like Grover Norquist have argued against a VAT specifically because of that: "The VAT is embedded inside the price of a good (as opposed to the U.S., where sales tax is transparent and on top of the price). As such, people forget they pay it, and European governments have found it too easy to raise the tax repeatedly over time." https://humanevents.com/2010/04/23/dont-give-obama-a-vat/ https://humanevents.com/2010/04/23/dont-give-obama-a-vat/
- Entalpi 6y ago
  I love how the argument being played is that VAT is used to fed a big government. Like the US is huge, it requires a large government..
syshum 6y ago
Business collect and remit taxation on behalf of the customer, so no the business is not "paying" the taxes. It is the consumer that owes them the business is just collecting them for the government. For which the business gets a small fee to do this service for the government. If the business did not collect taxes then you the customer owe that to the state still and are suppose to self report that and pay the owed taxed annually This is the same as Tax withholding from a paycheck, you owe the taxes but your employer is collecting and forwarding them to the government on your behalf, the big difference here is the purchases are not tracked by individual tax payer
- thekyle 6y ago
  > If the business did not collect taxes then you the customer owe that to the state still and are suppose to self report that and pay the owed taxed annually Interesting. But do people actually do this in practice? I wonder if states report what percentage of sales tax comes from businesses vs individuals.