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.
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.
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.tripadvisor.com/ShowTopic-g187234-i138-k10962835...
https://wise.com/gb/blog/transparency-an-open-letter-from-th...
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.
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.
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.
(I know this isn’t true in practice because of exclusions from sales taxes, but we could imagine one that applied to all consumption.)
There is some strange axiomatic derivation happening in this thread. The term "regressive tax" has a specific meaning; we can just start with that as an axiom, rather than re-deriving all of economics. A regressive tax is simply one that takes a higher percentage of income from low-income taxpayers than high-income taxpayers.
It's a lot harder for a city to collect income tax than sales tax.
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>)”
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.
Many stores like to pre-tag each product package, either at the store or manufacturer- you couldn't do that if the tax had to be included in the price as the stores have many locations each with different tax rates. (I do think the tax rates should be prominently posted at the door).
Sales tax compliance is already a massive PITA for retail stores. Making them include the sales tax on the tag would just be an even bigger PITA.
Yes, it can get a bit more complicated for internet based stores, but even there they do already know how much to charge at the payment step, so again I say that it is a (customer hostile) choice not to show the real price up front.
On the shelf, yes, but then what's on the shelf wouldn't match what's advertised on the Internet, in the paper, on TV and radio, etc. Because each city can have its own sales tax, and each state can have its own sales tax, if you're, say, McDonald's, you can't say a hamburger is $3.00 in your TV ad because it'll be $3.18 in Michigan, and $3.30 in California, and even within the states, it can vary by city, if I recall correctly from my cash register programming days. It's a stupid system all around, but it does actually make it harder to do what everyone wishes they would do.
That really sounds like a McDonalds problem. Why should everyone put up with a bait and switch so huge companies can have an easier time advertising? If they need to advertise a 3$ burger all over the country, then they should be ready to pay the cost differences of providing that burger everywhere.
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).
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.
VAT is still shown on receipts in the UK same as it is in the US.
I couldn't even tell you what the California sales tax is without referencing this table.
Consumers should be consciously aware of the split.
https://www.transportation.gov/policy/aviation-policy/airlin...
Cursory look at insurance company executive pay does not show any anomalies.
[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.
I suppose one could assert they are all in cahoots and have a secret deal to accept low single digit profit margins to keep out of the news cycle, while simultaneously agreeing to pay healthcare providers more and more each year, but I would want proof.
Tax is included in all end user prices in every European country I’m aware of.
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.
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.
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.
In America this is absolutely false in every sense.
It’s not the majority of the budget. They aren’t punishing success and they don’t “reward failure”. If you don’t want to succeed because a subset of your income will go helping those with bad luck then you’re welcome to be a failure.
> The "core responsibilities of the state" , that is the military, justice system and internal security, infrastructure usually consume less than 20% of government expenditures.
Hmm who said that was the core responsibility? I think you’re missing a bit in the list…
> We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
If the 6820 billion spent by the US government in 2021, 4394 billion were spent on income security, social security, health and medicare. That's almost 65% of government expenditures going directly to wealth transfer programs.
Mind you that doesn't account for all such programs (notably that value excludes education, housing, agricultural subsidies,etc...) So the real rate is actually higher.
The us is not unique in these ratios in the western world.
[0] https://preview.redd.it/us-government-revenue-spending-and-d...
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.
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.
If the taxes are silly and ridiculous (which many are), then they should be rolled back and people should know about them. That's not conservative, it's just common sense.
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