4 ms·

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

by Semaphor 3y ago

brewdad 3y ago
Largely due to inertia, consumer psychology where lower sticker prices encourage more purchases even when consumers know the checkout price will be higher, and the fact that taxes can be different based on the type of item you are buying and the exact jurisdiction you are buying it. Two identical stores across the street from each other can have different tax rates if they are in different tax jurisdictions. The stores have the info to calculate this, and do at checkout, so it's really the first two points mostly.
yamtaddle 3y ago
The two of my (American) kids who've gotten old enough to buy stuff on their own, even if it's just us sending them into a convenience store with money for something, have immediately recognized this system as idiotic, and they frequently complain about it. It's so plainly-stupid that, literally, even a child can see it.
qwytw 3y ago
Because sales taxes are ussually set by the local jurisdiction. So it could 10.25% in one place, 9.75% in the next town 8.750% and 8.975% if you drive for another 15-20 minutes. Imagine if you run a business, have multiple locations and want to buy a TV/Billboard/etc. ad with the price how would that work? You'd also need to make different price stickers, won't be able to print the price on the packaging etc.
- beojan 3y ago
  You could set one tax included price, so the actual revenue you get would vary slightly in different places. Costs already vary based on location so I don't see a huge issue there. Of course this does change the incentives for localities setting their sales tax, and they might be inclined to set them higher if the cost isn't borne by local residents. I don't know if that's a bad thing, if that money improves local services and / or lowers other taxes.

4 ms·

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

by Semaphor 3y ago

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

brewdad 3y ago
Largely due to inertia, consumer psychology where lower sticker prices encourage more purchases even when consumers know the checkout price will be higher, and the fact that taxes can be different based on the type of item you are buying and the exact jurisdiction you are buying it. Two identical stores across the street from each other can have different tax rates if they are in different tax jurisdictions. The stores have the info to calculate this, and do at checkout, so it's really the first two points mostly.
yamtaddle 3y ago
The two of my (American) kids who've gotten old enough to buy stuff on their own, even if it's just us sending them into a convenience store with money for something, have immediately recognized this system as idiotic, and they frequently complain about it. It's so plainly-stupid that, literally, even a child can see it.
qwytw 3y ago
Because sales taxes are ussually set by the local jurisdiction. So it could 10.25% in one place, 9.75% in the next town 8.750% and 8.975% if you drive for another 15-20 minutes. Imagine if you run a business, have multiple locations and want to buy a TV/Billboard/etc. ad with the price how would that work? You'd also need to make different price stickers, won't be able to print the price on the packaging etc.
- beojan 3y ago
  You could set one tax included price, so the actual revenue you get would vary slightly in different places. Costs already vary based on location so I don't see a huge issue there. Of course this does change the incentives for localities setting their sales tax, and they might be inclined to set them higher if the cost isn't borne by local residents. I don't know if that's a bad thing, if that money improves local services and / or lowers other taxes.