Because you pay the tax from the total of your purchase and not from each item separately. E.g. in Santa Monica, CA sales tax is 10.25%, a price on a $4.95 item with tax included would be $5.46 but on 10x of these items it's just $54.58.
Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay? Every exception that remains is an opportunity for weasels to justify why they are also the very important exception to the rule.
You sure that's worth a rounding error?
I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate.
>Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay?
For whom? I don't see how it would be better for me but as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?
Nope. VAT has complicated rounding rules too. Turns out it actually is still easy to roll it into the price.
> as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?
It's a lemon market. It's better for the customer if the actual price is displayed up front, but the customer has no way of knowing which shops are advertising real prices and which aren't.
You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you think it's a great idea you can put big sign saying on your shop/in your ad "inc. tax" instead of "plus tax", which is on most advertisements already. Surely customers could read it.
Customers have a sense that they exist and a vague idea of their magnitude, perhaps. They don't calculate them, at best they compare the advertised number - remember most customers are average intelligence or below.