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.... And this is why we don't just add it to the price? This is the grand reason? Wouldn't it be far better to establish a rock solid precedent that the price

by oehpr 3y ago

.... And this is why we don't just add it to the price? This is the grand reason? Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay? Every exception that remains is an opportunity for weasels to justify why they are also the very important exception to the rule. You sure that's worth a rounding error?

pandaman 3y ago
>And this is why we don't just add it to the price? This is the grand reason? I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate. >Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay? For whom? I don't see how it would be better for me but as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?
- lmm 3y ago
  > I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate. Nope. VAT has complicated rounding rules too. Turns out it actually is still easy to roll it into the price. > as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better? It's a lemon market. It's better for the customer if the actual price is displayed up front, but the customer has no way of knowing which shops are advertising real prices and which aren't.
  - pandaman 3y ago
    >It's a lemon market. You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you think it's a great idea you can put big sign saying on your shop/in your ad "inc. tax" instead of "plus tax", which is on most advertisements already. Surely customers could read it.
    - kelipso 3y ago
      Why are sticker prices $24.99 instead of $25.00? Tricks the brain into thinking the price is lower. Same thing with additional tax at counter instead of sicker price.
    - lmm 3y ago
      > Customers know both that the sales taxes exist and their magnitude. Customers have a sense that they exist and a vague idea of their magnitude, perhaps. They don't calculate them, at best they compare the advertised number - remember most customers are average intelligence or below.
      - pandaman 3y ago
        Everyone has a phone that can manage calculations nowadays, few people can or want to calculate precise taxes. I still don't see how it makes advertising prices with taxes a "lemon market", which somehow prevents businesses from advertising such prices, if I understood your assertion correctly. Some businesses do advertise prices with tax, most don't. If people really wanted prices to include tax they'd naturally took their custom to the businesses that advertise "inc. tax" and took it away from "plus tax" ones, resulting in the situation opposite to what we have now.
brewdad 3y ago
It really should be the norm. The business collects the sales tax on behalf of the state and then submits the tax on the basis of their sales. There is no good reason they can’t price items appropriately and submit the same tax directly.

by oehpr 3y ago

pandaman 3y ago

>And this is why we don't just add it to the price? This is the grand reason? I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate. >Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay? For whom? I don't see how it would be better for me but as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?

lmm 3y ago
> I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate. Nope. VAT has complicated rounding rules too. Turns out it actually is still easy to roll it into the price. > as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better? It's a lemon market. It's better for the customer if the actual price is displayed up front, but the customer has no way of knowing which shops are advertising real prices and which aren't.
- pandaman 3y ago
  >It's a lemon market. You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you think it's a great idea you can put big sign saying on your shop/in your ad "inc. tax" instead of "plus tax", which is on most advertisements already. Surely customers could read it.
  - kelipso 3y ago
    Why are sticker prices $24.99 instead of $25.00? Tricks the brain into thinking the price is lower. Same thing with additional tax at counter instead of sicker price.
  - lmm 3y ago
    > Customers know both that the sales taxes exist and their magnitude. Customers have a sense that they exist and a vague idea of their magnitude, perhaps. They don't calculate them, at best they compare the advertised number - remember most customers are average intelligence or below.
    - pandaman 3y ago
      Everyone has a phone that can manage calculations nowadays, few people can or want to calculate precise taxes. I still don't see how it makes advertising prices with taxes a "lemon market", which somehow prevents businesses from advertising such prices, if I understood your assertion correctly. Some businesses do advertise prices with tax, most don't. If people really wanted prices to include tax they'd naturally took their custom to the businesses that advertise "inc. tax" and took it away from "plus tax" ones, resulting in the situation opposite to what we have now.

brewdad 3y ago

It really should be the norm. The business collects the sales tax on behalf of the state and then submits the tax on the basis of their sales. There is no good reason they can’t price items appropriately and submit the same tax directly.