It's even enshrined into law in some states and locales. A few businesses have tried to market themselves as "no-nonsense, no-bullshit" and put the right prices on things, but that's totally illegal in parts of the US.
It's illegal to put on the price the customer is actually going to pay? My search attempt failed ("illegal to put price with VAT" neither g nor ddg liked it), please tell me more!
In fact, there was a wine store in New York City that tried to post the real prices and had some legal issues, so they would post _both_ the "price before tax" and the actual price (in some format that allowed them to evade the laws, so stupid).
I now live in the Netherlands. All prices are what you pay, _and_ the receipt breaks down how much of that goes to taxes, which I think is completely logical.
I think, showing the taxes separately is a very good idea in principle, so that you know how much tax you are paying. I usually hate the fact that I can not see how much tax I am paying, although, in Germany, the amount of tax is shown in the checkout pages.
The question is, does the tax matter so much it's worth putting it on every price sticker? I'd argue no - it's not like you can opt to not pay it. I assume your sales tax works like ours (Poland), i.e. per product/service category, so it's also not like you can buy a substitute product with lower tax.
I like the solution we have - price stickers have full price, and printed receipts carry tax breakdown.
Bizarre though it may sound, some politicians in America are in favour of badly designed tax systems, for anti-tax reasons.
By making tax as difficult as possible, they recruit supporters for their anti-tax stance, and they can claim they're delivering on their anti-tax policy by 'making the system collapse under its own weight' or 'making everyone aware of how much tax they're paying' and they can allow loopholes and fraud opportunities and they can collect donations from tax preparation companies.
It's the same here in Germany as well, was also the same in Greece and Turkey. I guess the whole Europe is like this, if not everywhere except the US :)
> The question is, does the tax matter so much it's worth putting it on every price sticker
Especially considering the fact that usually there are 2-3 rates tops, so one can easily remember that 5-10-20% of what they pay goes to the country coffers depending on the product being bought.
I can think of at least one reason where tax calculated on the final total vs each price is better (for the consumer), rounding. With tax calculated on the final total, you pay at most $0.01 extra in rounding “errors”. However with tax calculated on each price you pay at most number of items times $0.01, which is more and could add up over time. I personally want to give the gov as little of my money as possible.
That depends on whether they're rounding, or taking a floor or ceiling :). With proper rounding, it's a wash. I just did some back-of-the-dev-console calculations on a random groceries receipt I found on my desk, and I discovered that if the tax was calculated per item, I'd pay 0.01PLN less of it!
Regardless of the rounding method, the fair way is to sum up purchases and compute tax on the total, precisely to minimize the loss of precision on rounding.
Curiously, as far as I understand the Polish tax code (IANAL), the choice of the method to use is actually given to the vendor! The law recommends[0] that you calculate the tax by multiplying the rate with the total taxable amount, but also allows[1] the seller to choose to calculate per-item tax, and sum that. In both cases, mathematical rounding (half-up) is used[2].
But in practice, there's little to no difference unless you're doing a single purchase of a lot of items with weird pricing bias.
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[0] - Dz.U.2020.0.106 t.j. - Ustawa z dnia 11 marca 2004 r. o podatku od towarów i usług, art. 106e., ust. 7.
> That depends on whether they're rounding, or taking a floor or ceiling :). With proper rounding, it's a wash.
Agreed! If they are actually rounding it will be a statistical wash.
> Regardless of the rounding method, the fair way is to sum up purchases and compute tax on the total, precisely to minimize the loss of precision on rounding.
Again, agreed, this is why we do it this way in the US.
> Curiously, as far as I understand the Polish tax code (IANAL), the choice of the method to use is actually given to the vendor! The law recommends[0] that you calculate the tax by multiplying the rate with the total taxable amount, but also allows[1] the seller to choose to calculate per-item tax, and sum that. In both cases, mathematical rounding (half-up) is used[2].
US tax code, at least as far as income taxes go, uses the same rounding method (nearest decimal) however sales tax is can be quite a bit more complicated [1].
Also somewhat related, we quote our fuel prices to 3 decimals.
This assumes VAT is always rounded up, which is not the case in e.g. Germany where it is rounded to the nearest cent - so the average rounding error cancels out to 0.
Does the sticker have to show all taxes or just the sales tax/GST/VAT? I know that pretty much every country in the world has an alcohol tax that is applied to things like wine. So should the sticker also include that?
In the USA they have a particular hatred of making tax easier to pay. There's a political affiliation whose goal is to make filing a tax return harder and more complicated to do so that people will complain more about it and hate the process. So that has created the tax return filing industry and associated lobby groups. So having sales tax need to be applied on top fits within this world view.
But yes I completely agree that the sticker price should include what you actually end up paying for that item. I also like it in some countries where there's a unit or weight cost with the item, so you can more easily compare different branded products. Though they usually make this number comically small on the price tag to make it harder to compare.
> In the USA they have a particular hatred of making tax easier to pay. There's a political affiliation whose goal is to make filing a tax return harder and more complicated to do so that people will complain more about it and hate the process. So that has created the tax return filing industry and associated lobby groups. So having sales tax need to be applied on top fits within this world view.
Which political affiliation and what gives you this idea?
There's been a few articles here on HN relating to free filing and automatic returns and how the tax filing industry is fighting it.
One name that popped up after a quick search inside a long article was Grover Norquist. From his Wikipedia entry he is part of a political association which wants to prevent any rise in taxes. From another article I read long ago it was mentioned that this includes preventing automatic filing since the government could introduce new taxes without people knowing.
> In the USA they have a particular hatred of making tax easier to pay. There's a political affiliation whose goal is to make filing a tax return harder and more complicated to do so that people will complain more about it and hate the process. So that has created the tax return filing industry and associated lobby groups. So having sales tax need to be applied on top fits within this world view.
It's actually this:
> since the government could introduce new taxes without people knowing
Along with increasing gov size, increasing gov expense, and destroying another industry.
I'm all for increased competition in tax filing software, and you're starting to see open source competition here as well. But spreading opinion as fact, and in this case in particularly, is called "misinformation" or "fake news"
It's an opinion I have based on outside observation of the political culture surrounding tax in the USA.
There are groups of people (political association) and vested interests (lobbyists) who want to make tax harder to pay than it needs to be so they can profit from it, either politically or financially.
In addition you need to manually calculate the sales tax for every different county in the USA on top of the sticker price. It has been suggested that this is enshrined in law and/or done by the stores themselves, but the net effect is that this sales tax is at the forefront of people's minds when going shopping.
Nearly all other countries have tax systems where the VAT/GST/Sales tax is already included in the sticker price, so you don't need to know which country has how much sales tax and manually add it on. Additionally lots of other countries have income tax systems where the authority already has all your information and can easily provide you a pre-filled tax return.
Given that the USA does not do these things and people actively block them, then my opinion is that the country as a whole has a hatred of making tax easier to pay. Most people may not want that, but they are either unwilling or unable to change it.
> There are groups of people (political association) and vested interests (lobbyists) who want to make tax harder to pay than it needs to be so they can profit from it, either politically or financially.
NOPE! That's the misinformation. They don't want to make it harder to tax, they want to make it harder for the gov to add taxes. That's it.
> In addition you need to manually calculate the sales tax for every different county in the USA on top of the sticker price. It has been suggested that this is enshrined in law and/or done by the stores themselves, but the net effect is that this sales tax is at the forefront of people's minds when going shopping.
It is enshrined in law in some states, not all. And again the reasoning is so that tax cannot be hidden. Not to make it more difficult.
> Nearly all other countries have tax systems where the VAT/GST/Sales tax is already included in the sticker price, so you don't need to know which country has how much sales tax and manually add it on. Additionally lots of other countries have income tax systems where the authority already has all your information and can easily provide you a pre-filled tax return.
I'll need some evidence of this, as this is not my experience having traveled to many different countries. Some do, not most.
> Given that the USA does not do these things and people actively block them, then my opinion is that the country as a whole has a hatred of making tax easier to pay. Most people may not want that, but they are either unwilling or unable to change it.
Again NOPE. It's a hatred of ever increasing taxes. The gov must prove it needs the money, not just have their hands in our checkbooks whenever they're dry.
So ultimately you have a different view on taxation, and that's fine. What's not fine is lying about why the other side is doing it. This is where that divide is coming from.
In the US, sales tax rates vary by state, county and even city. Some states have no sales tax. It would be impossible to advertise a price for a product when it would be so many different numbers depending on where you are. For example, if a big grocery store chain wants to advertise the price of a 6-pack of Coke, do they list 20 different prices or do they eat the difference in taxes and make the end price the same?
Not saying that this will work in US, but India is also like US, federation of states, with federal tax, state tax, city tax all over the spectrum over the length & breadth of country. All advertisements of car, butter, biscuits, house, anything which can be priced over TV/Media advertises its MRP (maximum Retail Price), which is also printed on product itself too. Retailer use stickers on shelf or on product itself to tell what is the actual price, which by law should not be more that its MRP. The taxes along the route, physically & supplier/trader wise affects the price, but it is illegal for anybody retailer to sell anything more that its printed MRP.
Yes, same packet of potato chips costs R20 at capital R25 at hill stations (but its MRP shows R25).
Where I live (Poland), prices on shelves are displayed in full (more than that, there's the price you'll pay for an item and price per unit of mass/volume, to enable comparisons), but on the receipt, there's always a per-product sales tax summary printed. So if I cared about sales tax revisions, I could easily notice it on the receipt. But most of the time, I just learn about revisions from a news article.
Surely most people pay the sales tax, in which case you're optimising for the less common scenario.
In places where including VAT/GST/BTW/whatever is normal, shops (usually targetting resellers or contractors etc) where a significant amount of people don't have to pay the tax, I think generally both prices are listed and it's required to be very clear about what's going on.
