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Taxes and fees should be mandated for all prices up front. This is how it works in most of the world, there's no good reason it shouldn't work that way here in
by switz 4y ago
Taxes and fees should be mandated for all prices up front.
This is how it works in most of the world, there's no good reason it shouldn't work that way here in the US.
Someone will come along and point out an edge case, but for the vast majority of retail situations this is doable.
- sneak 4y agoThis obscures the tax burden from the end user, transparently blending it with the price of the goods and the merchant's profit. Consumers should be consciously aware of the split.
- Schnitz 4y agoIt can be itemized on the receipt but the easily readable advertised price should be the number you pay, period.
- toomuchtodo 4y agoAirlines are required to advertise total price, but break out taxes at purchase. This is a solved problem. https://www.transportation.gov/policy/aviation-policy/airline-rules-fares https://www.transportation.gov/policy/aviation-policy/airlin...
- deleted 4y ago[deleted]
- epicureanideal 4y agoPersonally I find it very interesting that a $20 restaurant meal might only be netting $1 to the owner. Makes me feel like going out isn’t actually that bad of a deal.
- lotsofpulp 4y agoLots of retail businesses have less than 5% profit margin. Even insurance companies, including health insurance, have less than 5% profit margins.
- epicureanideal 4y agoWell I do wonder about the exec compensation at insurance companies though. 5% profit but mega million compensation packages…
- lotsofpulp 4y agoWhy would insurance company executives have any more (or less) negotiating power than any other similar sized business? Cursory look at insurance company executive pay does not show any anomalies.
- yamtaddle 4y agoNb. health insurance profit margins are now capped, in the US.
- lotsofpulp 4y agoAt 15% to 20%. So smaller profit margins indicate downward pressure on pricing from competitors.
- yamtaddle 4y agoWell, in point of fact, the limit is actually a mandate on how much they must spend on medical care. Their own operating expenses, salaries, advertising, et c., have to come out after that. So they could theoretically make 15% under that limit—except in practice that's actually impossible. Which means margins aren't necessarily 5% because of competition. [EDIT] That is, I'm skeptical that if one removed that limit, competition would keep margins where they are. Forcing all profit to come out of 15% of revenue probably does play a major role in keeping the actual margin as low as it is.
- zeroonetwothree 4y agoA lot more of it goes to the landowner in the form of rent. It could be around 25-35%.
- earthnail 4y agoWhy? The business is built on infrastructure that is paid for with taxes. Tax is included in all end user prices in every European country I’m aware of.
- sneak 4y agoNo, the business is built on infrastructure that is paid for with a tiny fraction of taxes. They are not congruent. Taxes in Europe are also much higher in general. Perhaps this is a result of obscuring the amounts in the advertised prices—it never raises to the level of conscious consideration of the tax burden at point of purchase.
- vineyardmike 4y agoIf the government runs a deficit- which it does- then the taxes are literally too low to cover the infrastructure so it can’t be “a fraction”. Sure you can argue some of that goes to military (a safe nation is kinda infrastructure) and healthcare/Welfare (healthy and fed employees and customers are good for business too) but regardless your view on taxes, they all somehow end up back to helping the nation regardless of how efficiently or directly that happens.
- johngladtj 4y agoInfrastructure is essentially a rounding error on most developed countries state expenditures. In many cases it's even self-sustaining due to licensing agreements with companies that managed the infrastructure in return for the toll revenue. The idea that the primary purpose of taxes is to provide infrastructure hasn't been true ever. The bulk of expenditures are social welfare programs and other similar handout and wealth transfer programs intended to punish the successful and reward the failures for political purposes. Social security, healthcare, education often comprise over 50% of expenditures in most first world countries. Interest and debt are also another major expenditure. The "core responsibilities of the state" , that is the military, justice system and internal security, infrastructure usually consume less than 20% of government expenditures.
- hiq 4y agoIn Europe I still haven't seen a bill without the VAT clearly shown in the final bill. I've also seen shops showing the two prices, one without the VAT, one with. But if only one is shown, it should be the one I will pay.
- darreninthenet 4y agoThat's because it's illegal in the EU to display or advertise a price to a consumer (ie not another business) without VAT added.
- vore 4y agoAs the average consumer, I would much rather see how much money I need to take out of my pocket on the sticker price rather than deeply considering what the tax burden of my jug of milk is.
- lockhouse 4y agoWe can have both. Sticker price can be all-inclusive price with taxes and fees required to be listed in detail on the receipt.
- crote 4y agoSo have them put both prices with and without taxes on the label if they want to. The total tax burden will be listed on the receipt anyways.
- rootusrootus 4y agoSo, the same reason we can't have the convenience of pre-filled tax returns from the IRS? People need to be able to feel the pain of the taxes they pay, because it might help bring them closer to the ideological conservative viewpoint.
- lockhouse 4y agoWhy would ensuring people know how much they are paying in taxes be a bad thing?
- zamadatix 4y agoIt's not so much the concept that's bad as the proposed execution. Bold the amount that came from tax next to the total on the receipt or similar, it'll have the same effect without requiring people agree it's more important than knowing what the actual price of something is going to be.
- rootusrootus 4y agoYou can do that without making them do all the paperwork. For nearly all taxpayers the IRS already knows how much you owe, and can give you a return that is already filled out. But people like Grover Norquist believe that anything that makes paying taxes easier will cause people to become more accepting of taxation in the first place. So we all need to suffer the pain of filling out a return from scratch, to make sure we have the right attitude towards taxes. Nobody is having the information hidden from them in any case. Even pre-filled from the IRS, it would be right in front of you.
- yamtaddle 4y ago1) There are other ways to do that that don't annoy people so much. 2) Surveys about understanding of how taxes work, of personal or typical tax burden, and even about whether a given individual believes they were affected by some new high-profile tax law or other (versus whether they actually were...) demonstrate pretty damn conclusively that this approach has entirely failed, anyway.
- twblalock 4y ago
- arrrg 4y agoSellers can still make it very clear how much of the sum were taxes. Here in Germany every bill, every receipt will contain that information. (I mean, obviously, it’s legally required.) Different sellers do this differently in terms of clarity, though I think this has little to do with any kind of price signal to the buyer or sticking it to the government or something like that. My feeling is that the more likely it is that the customer is a company (which do not have to pay VAT) the more clearly do sellers communicate the VAT part of the price. In fact, if you are not selling to consumers you can ditch that VAT altogether when you communicate your prices. Alternatively (when talking about online retailers) they may provide a toggle to switch between being a business customers or a private customer, e.g. here the toggle top left next to the Conrad logo: https://www.conrad.de https://www.conrad.de
- wpietri 4y agoAnd it's better for businesses too! They get to compete on honest things like quality and cost, not BS like tricking you into weird fees.
- lockhouse 4y agoIf it was better for businesses it would already be the common practice.
- baron816 4y agoNo, it’s a coordination problem. If you’re the only one hiding your prices in fees, it can be an advantage since it looks like you’re charging less. Everyone has to do it to keep up, but since everyone does it, no one really gets an advantage. With mandated transparent pricing, no one has an opportunity to “cheat” and everyone can specialize (in cost or quality or features/amenities, or some mix of those).
- wpietri 4y agoNot at all. A great example is health codes. Serving good, safe food is something pretty much every food business wants to do at the outset. Nobody opens a restaurant thinking, "Let's see who we can get sick!" But imagine your hamburger stand is next to a guy who's willing to cut corners. Use the older meat. Buy from the dodgier supplier. Maybe spend less labor time cleaning. Suddenly his prices are lower and you're losing business. Other restaurants nearby are too. You're faced with a choice: do you cut corners, or go out of business? So if you talk with restaurateurs, you'll find that most of them are in favor of health codes and health inspections, because although they can be a pain, they're keeping competitors on a level playing field. They like food safety laws for suppliers even though they make prices higher, because they don't want to have to worry about giving their customers unsafe or suspicious food.
- phist_mcgee 4y agoGreat analogy, never thought of it this way.
- cscurmudgeon 4y agoThis is a world wide problem. After traveling in Europe, I think it is a global issue and quite bad in Europe. Banks across the European Union slap customers with hidden fees, offer financial advice that can turn out to be harmful and provide inadequate information to consumers before they sign up for accounts, according to a report released Tuesday by the European Commission. https://www.wsj.com/articles/SB125363506624231121 https://www.wsj.com/articles/SB125363506624231121 https://www.tripadvisor.com/ShowTopic-g187234-i138-k10962835-BEWARE_of_Auto_Europe_s_hidden_fees_taxes-Nice_French_Riviera_Cote_d_Azur_Provence_Alpes_Co.html https://www.tripadvisor.com/ShowTopic-g187234-i138-k10962835... https://wise.com/gb/blog/transparency-an-open-letter-from-the-tech-community-to-the-european-parliament https://wise.com/gb/blog/transparency-an-open-letter-from-th...
- ensignavenger 4y agoSales tax rates change too often in the US for this to work. I like the idea in concept, but I can understand why it doesn't work in practice in the US given the current tax regime.
- zamadatix 4y agoHow often is sales tax changing that it becomes infeasible to update the shelf price tags? The grocery stores seem to handle it just fine changing the "buy one get one" type tags every month!
- manquer 4y agoA lot harder to do online without knowing the zip code . People are sometimes vary of sharing that just to see full price
- runarberg 4y agoTwo solutions: a) Universal sales tax within the state. Allow local governments some other varying taxes (such as income or paycheck tax) b) Put small bracket under the price “(includes 9.5% sales tax for zip 98210 <a>change location</a>)”
- zamadatix 4y agoI think anonymous online price viewing would have to exclude tax for that reason but e.g. being logged into Amazon it would be best to display the default/selected taxes for ship address. I believe this is how most places, including Amazon, do shipping time estimates today - generic unless specified or you're logged in. In general though I think physical storefronts would be the shoe in. Virtual might require more thought or even changes to how we do taxes to make as much sense.
- ezfe 4y agoSites have already solved that for shipping costs - you just have a button that offers to include shipping (and then tax) with a location entered
- noveltyaccount 4y agoYes. Just require that the price you see is the price you pay. Full stop, no exceptions, not even tax or tip. But I guess I'll take this step in the right direction.
- weberer 4y agoOr just abolish sales tax. If the states want the money, they can just raise state income tax, which they're already charging, by a few percent. As it is now, it just complicates things and disincentivizes consumers from making purchases, which slows down the local economy.
- tptacek 4y agoIncome taxes deter saving and investment, but are easier to target. Sales taxes are hard to make progressive (they're usually regressive) and can be harder to enforce (if they're local). It depends on your goals. It sort of makes sense that we have both, at differing rates.
- Jolter 4y agoWhile I agree with you mostly, why wouldn’t you call sales tax progressive? The more you earn, the more you will spend, so the more you pay. The big issue I have with sales tax is that it is a much worse solution to the problem than a simple value-added tax (VAT). Most countries have figured out that VAT is more difficult to cheat.
- kneebonian 4y agoYes that is generally common sense reasoning but it is called regressive because then poor people spend a larger % of their income. Honestly seems like some mental gymnastics to me to argue that regressive is about what % of income is spent on taxes rather than amount of taxes paid but that's the argument.
- deleted 4y ago[deleted]
- tptacek 4y agoThat's the definition of a regressive tax.
- KMag 4y ago
- rahimnathwani 4y ago"there's no good reason it shouldn't work that way here in the US" There is a good reason for taxes to be shown separately: it draws your attention to how much the government is charging you. Like you'd, I'd prefer prices to show the total amount I have to pay, but I accept that there is at least one good reason against the situation common where I'm from (the UK).
- digianarchist 4y agoVAT is still shown on receipts in the UK same as it is in the US. What’s annoying in the US is sales tax isn’t applicable to a range of items depending on the state and often not at all on services. When it’s included in the price there’s no surprises at the register.
- rahimnathwani 4y agoVAT is still shown on receipts in the UK same as it is in the US. Even so, I'd bet that most Brits couldn't tell you what the standard rate of VAT is, or guess something between 17% to 23% (i.e. to within 15%). I'd imagine that a greater proportion of Californians could tell you that sales tax is about 10%.
- digianarchist 4y agoI think most Brits know VAT is 20%. If they don't it's because it's changed three times in the last 15 years. I couldn't even tell you what the California sales tax is without referencing this table. https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
- snotrockets 4y agoNothing stops you from printing it on the receipt, or putting it in the sign. Just don't force the buyer to do the math themselves.