Watching a documentary, there was aremark from the journalist on how, due to how wildly taxation on goods may vary, from area to area, in the US, most retailers do not put the full prices on the shelves and instead just tally it at checkout.
This made no sense to me, a european, as when I go to any regular shop, prices already include all taxes applicable to the product.
There are specialty stores where VAT and other taxes may not be applied on the price on the shelf but those are usually wholesellers, selling for professionals, that already know what additional taxes will be added and at which rates, at checkout.
Not having the full price you’ll be paying, on display, seems very underhanded and a bad practice. The client should know how much they are going to pay from the moment they pick an item.
Ignore it.
Sometimes I am like egh, that’s annoying and more than I expected and then carry on with buying whatever it is. But that is a more recent thing, now that am being more frugal. For like a decade I would say I never acknowledged it or thought about it.
I think in pretax numbers and just expect the final price to be higher - how much higher I have no idea because not everything is taxed. It was a major pain in the ass when I only had cash cus I never knew how much to take with me. Now I only use credit cards so it’s much better.
I think that builds into the credit card trap.
You should not need to guess-timate how much you’re going to spend, that is the issue.
If you want to pay in cash, that’s it. Pick up the items, add it in your head, that’s it. Witholding how much you are really going to spend by not applying all charges holds you hostage.
Yes, you can just put it to your card and pay it later but why?
It may help, but credit cards aren’t the reason.
Sales tax is something that can be charged at all levels of government, including individual cities in some states. It is easier to advertise one pre-tax price than deal with the variance of advertising post-tax prices.
And I keep thinking my country’s tax system is weird.
No way! That is ridiculous. That is essentially equating to create tax havens inside your own country. What is stopping people from high taxation states to just go for a shopping spree on a non-taxation one? Or even a city or town? Nothing. It makes no sense.
My country has a mainland and two autonomous regions. All taxation is designed centrally. VAT, special taxes, income, private and corporate, vehicles, land, house, etc, everything is established centrally. The autonomous regions do have the freedom to fine tune the end % of tax but really nothing else. They can’t exempt a tax, just because.
shopping spree on a non-taxation one
You have discovered Delaware.
That is awful.
It gets worse.
A lot of incorporation law is done at the state level, so most corporations are incorporated in Delaware where there are no corporate taxes and specialized corporate law courts.
A lot of credit and gift cards are out of South Dakota because that state has favorable credit card and gift card laws.
A lot of the laws of the country are written at the state level by design.
That is an entire level of idiocy and corruption by itself.
I use credit cards cus I get cash back and it’s also how I manage my budget - each major category has its own credit card so I can easily see how much I spend on each category per month and per year.
No amount of cashback is enough to convince me to sign up to one.
Well… maybe 100%.
Eh, I mean they’re designed to be as predatory as possible but if you do math and treat it as a debit you literally just get free money back.
Also you need a credit history here as no credit is treated as the same (if not worst) than bad credit and the only other options for establishing one is taking out loans.
If you’re okay never being able to finance a vehicle or house though, then no credit history is fine as long as you can provide full cash for those purchases up front.
I’m aware of that qwirk in your system. No such thing here. And I have a mortgage to pay.
An extra six percent isn’t really the difference between a big purchase and a small one, so it’s pretty much just background noise for me. I know to leave some wiggle room if my budget is tight but don’t make the effort to calculate my technical maximum. Worst case scenario I get one less item than I planned.
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Yes.
Let me tell you when, why, and how I learned that you need to pay attention to taxes.
I was in third grade and my class had a field trip. This was 47 years ago, so the exact details of the trip are lost to time and rusty memory. The lesson remained.
There was something that the class could purchase at the end of the day on the trip and the place only took cash and the school was not doing anything to help, except tell the kids about it and the price. Which was something like $5. I told my Mom and she handed me a $5 bill, plus a quarter, which confused my 3rd grade brain. She said to due to some strange words "sales tax, which was 5% in my state at the time. Got to school that morning and all my classmates were proud that they had their $5 bill, but none seemed to have a quarter. So I kept the presence of my quarter a secret and was a little embarrassed about it. Yes, I was young and stupid. Now I am old and stupid.
When it came time to purchase the whatsit at the end of the day, me and one other of my classmates produced a quarter to buy it. The teachers and chaperones had to cover the sales tax for the other 20 kids and they were pissed.
I went to school and learned a lesson that has stuck with me for nearly 50 years.
I generally assume what I’m buying will cost 10% to 20% more from taxes and/or tips getting added at checkout. I agree it doesnt make sense and seems underhanded, they could post the actual prices if they wanted to.
As someone not used to it, I find it very annoying. Where I live the final sale price/cost to consumers is what must be advertised, by law. I remember car dealers attempted to omit delivery cost, a good while back, but that shit was shut down quick.
Is sales tax consistent across your country?
Yes, it’s a flat rate, which makes things a bit easier I suppose.
I did “tax included” when I sold stuff but it’s unusual. Yes we know there is tax, I know the tax rate here and it’s not difficult to calculate the total. Food, like groceries, is not taxable here.
I will say though - my husband wants a car and I keep having to remind him to gross up the price when he sends examples because on big things it is a big charge.
The average American does not include taxes in prices. This is also true in Canada.
That is so bizarre.
Many of us are in the habit of mentally calculating it wherever we live though.
For example, my state sales tax is 6.88%, my county has a .25% tax on top of that, and then there’s a metro area tax of 1% on top of that, my city does not impose a separate tax of their own, so total sales tax in my city is 8.13%.
When shopping we’ll do the mental math (roughly) and factor that in so it might say $39.99 + tax but I know that it’ll be a little under $44 with tax.
It’s inconvenient but, like most things, we get used to it and adapt. Also, while tax varies a lot by state, most of us don’t venture too far out of our home area so tax is roughly the same all the places we regularly go.
It would be nice to have the price listed as the price you pay but it doesn’t work as well with our current system.
That’s why they feel that taxes are robbery tbh. It mentally works against them.
Agreed
It’s inconvenient for sure. Sales tax varies so much accross North America that I guess it’s easier for them to advertise that way vs. custom signs for each province/state.
I would fully accept a law that allowed companies to advertise nationally the pre-tax price with a small disclaimer saying applicable taxes vary by location, and then require the in store price tags to reflect all taxes.
There’s no excuse not to anymore. Yes it does vary, and a computer can easily adjust the price.
That’s pretty much it. You have state, county, local/municipal taxes and it can get pretty convoluted real quick.
Annoying as well. Goodluck convincing anyone to change it.
Usually no. Taxes are different depending on where you buy. We expect there to be 5 to 9% added on at checkout.
Yeah, it’s shitty, but we also know it’s gonna happen. It’s not like it’s a surprise. Sometimes you might get a little extra sticker shock but it’s not as underhanded as it seems unless you’re very new to the process. The same way we tip, I just assume I’m gonna pay ~30% more than the price due to tax and tip.
I’ve also never had to budget so much that the specifics of the tax mattered to me, like I’ve never had to stretch money like that, so that could be part of it.
I’ve seen people discussing a cellphone offer that’s like “$800 but you get $800 of bill credits over 24 months” and they would say it’s a free phone. But you’d pay $800 plus tax up front and you’d not get that tax back.
Still a good deal, but it showed how many people were blind to the tax.
A lot of convenience stores around me don’t even have any prices shown on many items. Drives me crazy, but I guess many people are used to it? Sales tax is usually around 7% in most places I’ve been to, so if I know the price of an item, I know, roughly, what to expect.
No prices? Things are getting worse.
Yeah, that’s crazy to me too. Never happens in
Canadamy area, unless somebody messed up when shelving things.I think that would actually be illegal here, since price advertising is very regulated. For example, you must be given the price displayed even if it’s an error.
I’ve been in a bunch of convenience stores in Ontario that don’t have prices on items. this has been going on for at least nearly 10 years.
I stand corrected.
Alberta then. I’ll fix it. I guess it must be legal.
No price means I won’t buy. Because it means probably 200% mark up at least
Whether or not I factor in tax is entirely dependent on the size of the purchase I’m making. For the vast majority of purchases I make on a daily basis, I don’t think about it at all. 7% of $2.99 is negligible to me. However, if I’m making a large purchase, or if it’s a purchase which I know is subject to additional taxes beyond the sales tax, then I might consider it. 7% of $2.99 may be negligible, but 7% of $29,999 is a significant amount all by its lonesome.
For most people, I’d imagine this is most common when it comes to purchasing vehicles, as those tend to carry large prices and special taxes which results in a significant increase in price. For example, I purchased a new vehicle a couple years ago for MSRP, but wound up paying several thousand dollars more than that due to various taxes and the registration fees. I didn’t know exactly how much those surcharges would be (though I easily could have calculated them by visiting my state’s Department of Motor Vehicles website and plugging a figure or two into their calculator) but I had a ball park idea which I could budget around. Also, I’m pretty sure the dealership I bought from provided an estimated total purchase price which included the fees for the locality it was located in. Unfortunately, most of that was irrelevant to me, as I had traveled from another state to purchase this vehicle, which illustrates the minor frustrations that an all-inclusive price tag would introduce in America.
Like, I don’t think you’re wrong for thinking it’s odd, and yes, there are ways to fix it, but it’s just such a non-issue (not to mention America’s “touchy” relationship with taxation meaning these attempts to “fix” things would rapidly become politicized) that no one cares to do anything about it. As someone else said, we intuitively learn what the rough tax rate will be for our common purchases and just factor that in.
As far as I can tell, once the question about price is asked, they will make a remark about how awful the Republicans or Democrats are (depending on their leanings).
We just think about the base price, but the taxes. Then at checkout you’re told “oh, that number you had in your head? Add 5-20% more as a surprise”
It’s a terrible system, very anti consumer. You never get used to it
Oh, and it also has the fun side effect of making sure nothing ends on a dollar amount
