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Comment by Osiris | Hacker News Reader

That’s not the case on the US (tax is added after the fact) and there hasn’t been a massive switch to cash. Convenience is a powerful thing.

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Consumer behavior in different countries is different and depends on many factors - culture, mindset, local customs and habits, structure of taxes and regulations etc. American system will not be convenient for Germans, for example (I personally do not understand how it can be convenient).

> personally do not understand how it can be convenient

It can be very convenient for retailers since sales can vary in different counties let alone states:

https://en.wikipedia.org/wiki/Sales_taxes_in_the_United_Stat...

just try to imagine what a mess it would be if any advertisement, price sticker etc. would have to show the full price.

It wouldn't be difficult at all. Price stickers are printed/managed in store often enough. Any company that allows you to purchase online already had to deal with differing sales tax, and everything is owned by like one company right now anyway so they already have systems in place to deal with differing tax rules in different states.

But it's not just states. In California (and I guess many other places) towns in the same country can have different tax rates. Sure price stickers is not an unsolvable issue but advertising prices including tax publicaclly would be almost impossible.

> everything is owned by like one company right now anyway so they already have systems in place to deal with differing tax rules in different states.

Yeah I agree it would generally be a much higher burden for small businesses than for Amazon.

Why is calculating the price with correct tax possible but not the advertising of that price? What is the physical bottleneck?

GP has it wrong. It's entirely physically possible to advertise prices including tax, but it's illegal to do so.

I see it as a mess in the tax system being projected to customers. I do not understand the choice of taxpayers to have such system.

Well local jurisdictions are funded by sales taxes they themselves set. You live in a tourist town? Well higher sales tax results in more funding for local services and possibly lower property taxes and you could just drive to the next town if you want to save the 1-2%. What's not to like?

There’s so much wrong with this, that I don’t know where to start. So let’s start with the elephant in the room: driving to next town to buy something that is available locally is generally a red flag of market economy failure, because it is incredibly inefficient and environmentally harmful.

Then there’s an incentive to produce higher inequality: high sales tax affects mostly poor, while low property tax usually benefits rich. Poor people are usually underrepresented in democratic institutions, so it would not be surprising if inverse redistribution would be a frequent problem.

Finally, local tax as a way to fund communities is not the only alternative and relying on it would mean that some communities will never get out of financial trouble. Tourist towns are minority, after all. Other countries just keep some of the collected VAT locally and redistribute excesses from richer to poorer communities through federal transfers (German solidarity tax did exactly that, for example).

That's because it has never been that way in the US, or at least not during my lifetime (I'm over 40). Having the fees be added on wouldn't be much different from an increase in sales tax or having your phone bill be more because the quoted prices don't include tax. Cash already has surprise totals.

Convenience isn't even a factor.

Compared to other places, where the price is what you pay (in most cases). You would be adding inconvenience and a little uncertainty to one form of payment. Americans would switch too, if this were the case.

And people in Europe are usually puzzled why you’d have such a crazy system, yes.

The two of my (American) kids who've gotten old enough to buy stuff on their own, even if it's just us sending them into a convenience store with money for something, have immediately recognized this system as idiotic, and they frequently complain about it. It's so plainly-stupid that, literally, even a child can see it.

Largely due to inertia, consumer psychology where lower sticker prices encourage more purchases even when consumers know the checkout price will be higher, and the fact that taxes can be different based on the type of item you are buying and the exact jurisdiction you are buying it. Two identical stores across the street from each other can have different tax rates if they are in different tax jurisdictions.

The stores have the info to calculate this, and do at checkout, so it's really the first two points mostly.

Because sales taxes are ussually set by the local jurisdiction.

So it could 10.25% in one place, 9.75% in the next town 8.750% and 8.975% if you drive for another 15-20 minutes. Imagine if you run a business, have multiple locations and want to buy a TV/Billboard/etc. ad with the price how would that work? You'd also need to make different price stickers, won't be able to print the price on the packaging etc.

You could set one tax included price, so the actual revenue you get would vary slightly in different places. Costs already vary based on location so I don't see a huge issue there.

Of course this does change the incentives for localities setting their sales tax, and they might be inclined to set them higher if the cost isn't borne by local residents. I don't know if that's a bad thing, if that money improves local services and / or lowers other taxes.

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