Comment by techsupporter | Hacker News Reader

Comment by techsupporter | Hacker News Reader

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Sometimes it is incompetence; someone flags a certain thing as the wrong classification and it comes out of the wrong bucket.

But I think it's more than that, here. The settlement covers almost the height of when Uber and Lyft were desperately trying to undercut everyone else in the market--taxis, public transit, taking a bike, scooter-share, anything--and keeping these out of view of the customer helps a lot in that effort by making the price look lower.

> The Uber settlement fund is for people who "drove for Uber between November 10, 2014, and May 22, 2017, and had deductions taken for New York sales tax and Black Car Fund fees." The Lyft fund is for people who drove for Lyft between October 11, 2015, and July 31, 2017, and had the same kinds of deductions.

By my mind, it's in the same vein as businesses (everyone from Comcast to that small restaurant on the corner) that list one price in big numbers but tack on surcharges at the end. Obscuring the true price should be more illegal than it is.

The trouble is that Americans seem to be onboard with not adding taxes, and so that's your slippery slope right there. In Europe regulators are like "If the headline price is €10 but actually nobody pays €10, that headline price is wrong and must be fixed" and they're including taxes in that.

In IT there was a UK battle years back when magazines were still a big deal about whether you could advertise prices without VAT. All these companies charge retail customers VAT of course, but in effect the way VAT works the price is without VAT if you are yourself a business that claims VAT refunds. So the argument in some of these magazines was, look, you can buy this magazine as a hobbyist, you can buy this Western Digital 200MB hard disk from an advertiser as a consumer, and you'd pay VAT. But actually they advertise in our magazine because many readers work in IT, so while they might get 10 hobbyist orders for that 200MB disk, they also get one or two business orders for a hundred drives, and those customers don't pay VAT so why must we show VAT prices ?

I’ve never been sympathetic to the American argument that we want people to constantly feel how much they’re paying in taxes, but VAT might be a good point in their favor. VAT is very high (20-25% in many countries) and horrifically regressive. It would be a nonstarter for even people like me, who support raising taxes in the US, because of that.

VAT has other benefits though that would fix a lot of weirdness that traditional sales tax has. Taxing the value added makes a lot more sense than taxing the "sale", IMO. It distributes the tax fairly among all businesses in the supply chain and eliminates double-taxing that can happen when the local mom and pop shop resells soda from Sam's Club.

There is of course no national US sales tax and every state does it differently - some even have no sales tax at all - but generally speaking, it’s already structured to prevent double-taxing situations like the one you’re describing (plus groceries are usually exempt anyway in both cases.)

The issue is VAT is astronomical compared to the US and hits the poor hardest because consumption taxes are regressive. If it were more apparent on on pricing how much was tax, I could see people who make that argument here having a point. I find it hard to believe Europeans would not blink at seeing such a regressive tax day after day.

It doesn't really matter how regressive an individual tax is as it's part of a larger system.

You don't just pay regressive VAT, you also benefit from progressive income tax, progressive education and health policies, etc.

It certainly matters to the poorer people who could buy more stuff if their tax burden was shifted more fairly. This has concrete effects: VAT has no impact on a wealthy person say, stocking every room in his house with a 80” 4K TV, while it makes a big difference to the poor person who wants just one TV. The effect compounds over time, obviously, and for more important purchases as well.

The US state and federal governments spend 1.5 trillion per year on Medicaid, Medicare, CHIP, and VA health care. The actual number is even higher than this by a fair margin because many US health systems are owned by local governments, and US government employee health spending isn’t accounted for either. With 330million US citizens, that means per capita US government health care spending is 4500. Most countries are able to fund their entire public health care systems with very similar per capita numbers; America doesn’t have universal public healthcare because the system is broken, not because it needs the money. So very high consumption taxes aren’t the reason Europe can afford good health policies - the American government already spends the same amount, and could stand to dramatically increase income taxes on high earners.

> The trouble is that Americans seem to be onboard with not adding taxes, and so that's your slippery slope right there. In Europe regulators are like "If the headline price is €10 but actually nobody pays €10, that headline price is wrong and must be fixed" and they're including taxes in that.

Again the problem is that the taxes are different in every municipality and state which presents a calculating nightmare. I mean you do the math on 0.0625% of $17.23. It's super difficult to do and can change frequently anyone that wants to run a business in more than one or two municipalities would have to hire someone full time. Plus there's the extra headache of running a sale, etc.

It is more helpful to think of the US as 50 different states that have a common federal government rather than a single united whole.

If they can charge it, why can't they mark it?

They can and do (airline tickets for example). Most hotel web sites will also give you an "all-in" price, although they retain the dark patterns of displaying the ex-tax rate by default, and slipping in a "resort fee" when you check in.

Airline tickets and hotels are straightforward because everyone will pay the same sales tax.

At least not too many hotels or airlines offer “$99 at any of our locations in the country” deals. Dunno how it works for “free” stays paid with points in fixed amounts.

Gee, if only ride share apps had access to both your starting and ending locations so that they could accurately assess taxes and fees. This is not an intractable problem when your product is a software platform that can look at the location data and do the math for you.

> anyone that wants to run a business in more than one or two municipalities would have to hire someone full time.

Yes, when you're trying to operate a nation-wide business, you should generally hire accountants and lawyers, or at least consult with them and take their good advice.

Yep, if it's "too complicated" to follow the laws in the areas where you have chosen to do business, then you should not do business in those areas, or you should hire someone smart enough to work it out.

Americans also don't know how much their taxes are. Retailers often use taxes to hide extra charges by bundling both into a "taxes and fees" section, which if enumerable always includes more fees than taxes. Uber Eats, GrubHub, etc all do this.

It's worse in the US where the retailer doesn't actually know what the taxes are until you enter the shipping address.

But somehow this isn't a problem in the EU. I can order from Germany? Spain? Italy? Yet the price is what is shown 'on the sticker'. Of course there are delivery charges, which seem to vary quite a lot (though often free for big ticket items).

In the US the sales tax rate can vary by city, county, and state. Aside from shipping charges, the shipping address is needed to know which governments need to be paid how much.

I suspect it might be how taxes are organised - in the EU we have VAT, so paid to the government where the good/service was created, but in the US it is sales tax, so paid to the government where the good/service was purchased. That's my guess anyway.

You are correct

Although VAT ultimately flows to where the value was created the consumers are paying tax when they purchase the final product. If I buy a loaf of bread, a sausage, a "home made" cake and a bottle of Coke at the Polish store, the tax for me, the consumer, is local tax.

It isn't necessary for me to know that the sausage actually came from Poland, the bread from a specialist bakery six miles away, the "home made" cake actually was made in the proprietor's home surprisingly albeit at some scale, while the Coke travelled second furthest in its current form, from Wakefield in Yorkshire, over an hour away. These things matter in terms of the onward destiny of the tax money -- Poland gets tax revenue for producing sausages, but not for the bread made to a Polish recipe in a foreign country -- but to me the consumer they're irrelevant.

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