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Comment by tomschlick | Hacker News Reader

It has way less to do with any "awareness campaign" and more to do with how tax rates are different in many municipalities that are very close to each other and how hard that makes advertising.

For instance, the famous "$5 footlong" from Subway couldn't be advertised that way nationally, or even within a single state or metro area due to different taxes on prepared food.

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I'm pretty skeptical there. Do you have any evidence that was a big motivation?

I'll note that the costs of labor, space, and other inputs also can vary widely across a state, so tax differences don't strike me as unsolvable. And regardless, "prices and participation may vary" is an extremely common disclaimer for ads with prices.

Subway national ads & coupons (among other practices) in particular are notorious for immiserating or ruining their own franchisees. My nearest one keeps a sheet with the list of the ones they'll actually honor.

I wanna say Little Caesars had kind of a similar situation. I think they actually had a fight at one point with their franchisees over their too-static-to-be-realistic very-low prices.

In practice, these national campaigns seem to kinda be a bad thing, anyway—either abusing franchisees who can't evade them, or else not actually being offered universally (which is pretty damn close to false advertising, "participating locations" fine-print being more a bullshit dodge than something intended to truly communicate the truth of the offer).

Why is that an issue? Subway could easily find another campaign, such as “$5* footlong (*or less depending on local taxes)”, “affordable footlong”, or whatever. If your advertising campaign depends on being deceptive, I find no issue with it becoming impossible.

Are local sales taxes just a US thing? How do so very many other developed countries manage this just fine?

The US, thanks to being well, states that are united, has a history of devolved government. In a lot of places the power structures are much more unified, but here there's a tradition of independence within broad limits.

There's a short history of California sales taxes here on page 3 (which is ~30 by PDF page count): https://www.ppic.org/wp-content/uploads/content/pubs/report/...

But basically during the depression, state-level sales taxes arose in a lot of places. Some cities/counties/districts then got in on the action. This means that people got to decide their own levels of taxation (and spending) on a much more granular level. Which as somebody who lives in a high-tax/high-service area (relative to America, not to the civilized world) is great by me.

Careful what you wish for—it causes strong race-to-the-bottom effects and tragedies of the commons / free-rider problems—if tax districts are small enough, I can go enjoy the parks in a neighboring tax district while having chosen to live where taxes are insufficient to pay for such nice parks. Extend for everything, not just parks, and you've got the situation in tons of major US cities, where low-tax suburban and exurban towns attract people who pay taxes in their little town but strain the public resources of the city proper, which city is the only reason those towns are 1/10 the size they are in the first place. City forced to raise taxes by all the free-riding, effect intensifies. It's not great.

interestingly, sales tax in San Francisco (8.63%) is noticeably lower than in the Easy Bay (10.25%).

replacing big ticket items such as a macbook pro 16” ends up being about $40 cheaper, especially for someone commuting into the city for work anyway.

You can, you just do the math backward so it’s $5 everywhere (or $6 or whatever).

From a compliance perspective that would work. However, that means that franchisees in high-tax areas like Chicago make 10% less per sale than those in Oregon or Delaware. That doesn't seem tenable in the long run.

I mean franchises in high cost areas already deal with this and survive. Or, as written, “at participating locations.”

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