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These fees seem to be particularly prevalent in the travel and entertainment industries. I stayed at a hotel in NYC relatively recently, and I booked and pre-paid through hotels.com. When I arrived, the hotel sprung me with a $50/night "resort fee", which was apparently required to stay at the hotel (though I am sure they would tell regulators that it's optional).

I also don't understand the US practice of not including relevant sales tax charges in the cost of a good. I know that many US states operate a sales tax (which seems like a bad idea as opposed to a VAT or similar system).

I don't mind having actually optional extras be charged separately, but if they aren't really optional (like a service fee), it should be part of the price.

I'd be very interested if someone has a link to the text of what is actually being proposed.

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Wow. I actually always assumed that the "resort fee" was to cover a hotel-specific tax, but I see that you're right.[1] Seems like a textbook case of manipulative business practices to me. I already felt like the anti-junk-fee law(s) couldn't be passed soon enough, but even more so now.

> I also don't understand the US practice of not including relevant sales tax charges in the cost of a good.

Sales taxes in general are a horrible can of worms, and IMO every area should migrate to income tax exclusively.

[1] https://www.cnn.com/cnn-underscored/travel/how-to-avoid-reso...

Indirect taxes (sales taxes, GST, and VAT) are more efficient than income taxes, both from a compliance perspective and a fairness perspective.

Compliance-wise, it's easiest to calculate and collect the tax on economic activity when an economic transaction occurs. From a fairness perspective, it's clear when an indirect tax applies; with income taxes you need a convoluted code to address the many types of income possible in a modern society.

> with income taxes you need a convoluted code to address the many types of income possible in a modern society.

Do you? You could tax all income the same way, but governments seem to like having the ability to use the tax code to incentivize certain ways of making money over others.

You're hand waving away what the same way means. What if I make 500k once every five years? Should I pay taxes like I make 500k every year once, and nothing the other 4 years? Should I be able to amortize that across 5 years?

What if I bought a house and flipped it as a business venture? What costs count toward the business and what doesn't? You have to define all of that before you know what you've earned.

Income is complicated, whereas a single transaction is very simple.

>and a fairness perspective.

that's arguable when they're not progressive and arguably regressive. Rich people earn more, but they spend less (as % of income) than poor people.

Yes, and this can easily be accounted for by not taxing necessities (or taxing them at the lowest rate), which is what most of the U.S. and EU already do.

"Luxury" items and other goods are subject to higher tax rates. Educational items are treated as their own category of goods in many places. Alcohol is often broken out from the luxury category and taxed at an even higher rate. Some places tax sports events but not cultural events.

And those are all things that are very easy to do at the time-of-transaction because all of the necessary information is available and the calculation is trivial.

it's possible to tax luxury stuff more, etc.

Then that makes it harder to collect/enforce. What counts as luxury? What if someone poor wants to buy a luxury item as a treat?

This is a solved problem, with different VAT rates. For instance in France there's a 2% rate for crucial things like medicine and some foods, 5% for other important things like electricity, 10% regular reduced rate and 20% for everything else. You can therefore easily target by saying this category of goods gets this VAT rate. E.g. jewelry being at 20% will only impact well off buyers.

I would hardly call it "solved". For the examples given:

>medicine

Semaglutide is a weight loss treatment that costs $10+k a year. It is ostensibly a luxury for the well-off. Does it fall under the 2% rate for medicine?

>and some foods

How is that determined? For instance, Parmigiano Reggiano DOP aged 48 months is arguably a luxury, but generic parmesan cheese isn't. Even if you could draw a line somewhere between the two, it's hardly trivial to do this for good ever. You either have to accept some absurd situations like the above, or have a sprawling bureaucracy tasked with determining what's a "luxury" or not.

> E.g. jewelry being at 20% will only impact well off buyers.

And what of a poor couple that's getting married? I agree such a tax might be approximate progressive (ie. on average the top 20% pays a higher tax than the bottom 20%), but it leaves much to be desired from a "fairness" perspective. A multi-millionaire driving a Corolla gets taxed more than some army recruit that just blew their signing bonus on a BMW. You also can't implement higher brackets on higher earning individuals as easily. How do you tax the likes of Bezos? It's not like they buy 100x more luxury items because they make 100x more. Most of their money is spent on investments, not consumption.

I would hardly call it "solved".

Your argument is based on ignorance of how sales tax/VAT codes work. Believe it or not, but tax people and businesses have been dealing with these issues for over a century now and they've mostly figured it out.

It is ostensibly a luxury for the well-off.

No, even for the well-off it is still a medicine.

Parmigiano Reggiano DOP aged 48 months is arguably a luxury, but generic parmesan cheese isn't.

In places where it matters, the sales tax codes can get as granular as they need to address this. They don't need a dedicated bureaucracy to make these determinations: it's either handled by the legislature or a very small team, since determinations like this are infrequent and don't require dedicated staff.

In this particular case: both DOP and regular generic parmesan are classified as foodstuffs by CA and neither would be subject to sales tax.

but it leaves much to be desired from a "fairness" perspective

Someone buying a budget car should be taxed less than someone buying a luxury car, regardless of the wealth or income of either buyer.

It's not like they buy 100x more luxury items because they make 100x more. Most of their money is spent on investments, not consumption.

Indirect taxes are not consumption taxes. They are transaction taxes, and investment transactions can be taxed under a sales tax, GST, or VAT regime. Some jurisdictions do tax investment transactions. In the U.S., taxing investment transactions has been proposed many many times over the past few decades. Wall Street have managed to beat off that proposal through profligate lobbying but every time the proposal pops up it gets more support...

> Semaglutide is a weight loss treatment that costs $10+k a year. It is ostensibly a luxury for the well-off. Does it fall under the 2% rate for medicine?

Trivially resolved. In France only medicine which can be reimbursed by social security (so only actual things that can be prescribed and work, not optional luxury or homeopathy crap).

> Parmigiano Reggiano DOP aged 48 months is arguably a luxury

In France I doubt there's any differentiation of fancy vs non-fancy versions of foods, let alone cheeses. It'd be insulting to the nation to contemplate such a thing.

> And what of a poor couple that's getting married

I didn't know jewellery was a prerequisite to getting married.

>(so only actual things that can be prescribed and work, not optional luxury or homeopathy crap).

I'm not sure what you're trying to say. Semaglutide has been approved (ie. has proven to work) for the treatment of obesity.

>In France I doubt there's any differentiation of fancy vs non-fancy versions of foods, let alone cheeses. It'd be insulting to the nation to contemplate such a thing.

Do you know this for a fact or just simply guessing? I find it very unlikely that France (or any other free market economy) doesn't practice product segmentation for foods.

>I didn't know jewellery was a prerequisite to getting married.

But poor and middle class people buy "luxury" stuff as well. When that happens, how is it fair that they're getting taxed the same as Bezos buying a mega-yach?

Various goods are already tax-exempt or tax-reduced, like groceries.

Then they pay taxes on the luxury but not their spaghetti.

Booking.com includes resort fees at checkout. If the website you booked on said it was the final cost, then you can fight it.

I assume it hit the same way my last stay in Vegas worked. I booked and prepaid through a travel site. The travel site made very clear that the hotel would be charging me a resort fee separately. The travel site was unable to collect this fee at my time of payment. When I checked in, they charged me the separate fee.

I knew about it and expected it because Vegas but it still felt slimy.

Oh for sure, I think it's stupid - and I hope that the Government is able to roll out the new rules because mandatory fees should just be part of the stay rate.

> I also don't understand the US practice of not including relevant sales tax charges in the cost of a good.

The idea is that if it's just baked into the price, customers will ignore it but if it's applied separately customers will consciously recognize the amount of money the government is taking from them and presumably apply pressure not to increase that amount.

It's not a result of government policy, but corporate policy. The corporations prefer to list the lower price.

When traveling cross country years ago with 3 cats I booked a budget at a fleabag motel for like 70 bucks based on part on it being listed as accepting pets. They tried to charge 50 bucks a head non-refundable for the felines then disclaim responsibility for listing these costs because the third party ran the ad.

> I stayed at a hotel in NYC relatively recently, and I booked and pre-paid through hotels.com. When I arrived, the hotel sprung me with a $50/night "resort fee", which was apparently required to stay at the hotel (though I am sure they would tell regulators that it's optional).

The king of those is Las Vegas. I have literally removed Las Vegas as the possible destination for trips before when I remembered their resort fee bullshit and got pissed off. I don't know how those things are even legal, other than the government gets their cut too so screw visitors.

Regarding US Sales Tax v.s. VAT.

Sales Tax is an indirect tax on consumption that is deferred until the end consumer makes a purchased, and taxed in the area they made the purchase (even online since 2018). Some end consumers are tax exempt and can avoid paying Sales Tax. Companies can write off taxes paid where appropriate. Everyone else in the value chain is tax exempt assuming they filed their paperwork correctly. Ultimately this means that there is no equivalent to a VAT recovery, reverse charing, etc, and the governments that collect sales tax don't see any money if something is never sold.

Sales tax is not included in the price because it is based on the price. If a widget is sold for $10 today, there is less tax paid if you sell that widget for $1 tomorrow. It doesn't matter if $9 of additional value was created along the way.

States, counties, and cities can have different sales tax rates for various reasons. For example, my city voted to add to the sales tax to pay for road improvements. There is a lot of travel into our area for consumption so it ends up that visitors pay for roads even if they don't refuel their cars in the city.

Sales Tax and VAT are not bad ideas, they're just different ideas. At the end of the day if your government wants a Dollar, a Pound, or a Euro, they'll find a way to raise it.

Regardless of the distinction between sales tax and VAT, if any given US state wanted to have the state sales tax be included in the price that is shown to the end-user (at least in physical stores that exist in that state), I don't think there's any federal law preventing them from doing so. In other words, rather than having the store list a pack of gum for $1.00 and then charging me $1.06 at the register, the state could just require that the store list the pack of gum at $1.06. If that means the price of a can of Arizona Tea has to vary by, like, two cents when you cross state lines, that's a worthwhile tradeoff.

Sales Tax rates vary by the address and don’t apply to some goods/services. Additionally, some states have holidays (like “back to school no sales tax days”).

That is to say that the retailer needs the recipient’s address before shopping, rather than after. Also, if sales tax is handled by an external API call, those costs would increase drastically if the same call must be made for each product listing price, as opposed to just a few at the end of checkout flow.

The bajillion-jurisdictions problem can be solved on an aggregate basis.

Charge everyone $100 inclusive-of-taxes. Keep $93.50 of that from a customer in Phoenix, $92.75 from a customer in Los Angeles, and all $100 from a customer in Oregon. If you have approximate knowledge of how your demand breaks down, you could come up with an all-inclusive price that produces the average bottom-line revenue you want.

You seem to be hand-waving away the accounting part and the fact that the subtotals for the same goods will be different for users in different cities.

Still not a good user experience.

Thank you for clearing that up - I was under the mistaken impression that most goods were subject to sales tax in the US, even in b2b transactions. I was not aware that most entities other than individual people were tax exempt. That makes the end result a lot more similar to VAT than I thought it was (though with a different way of getting there).

Given all that, why would we use a VAT system rather than sales tax? So that the revenue is more evenly spread across the lifetime of a good or service?

It's funny because I think both you and GP answered it? If the end result is almost the same, then... the reasons why one or the other is... Almost none really?

Or to put it another way, for historical reasons?

(I'm playing AC Unity right now... Set in Paris during the French Revolution... And you know what the contemporary city walls were used for? Tax collection purposes...)

This kind of stuff should be settled in trade agreements IMHO...

Which made me think about a future EU-US trade agreement... But guess what? Fucking Trump torpioed it.

https://en.m.wikipedia.org/wiki/Transatlantic_Trade_and_Inve...

> When I arrived, the hotel sprung me with a $50/night "resort fee"

If you voice your objection, follow up in writing, and have a decent credit card, you can almost certainly get it charged back. Because the hotel is not going to say, in writing, it isn’t optional. (You may not be welcome back.)

Most if not all hotel/casinos I've stayed at in Vegas and Atlantic city have added a mandatory "resort fee" for many years, and will happily tell you to go pound sound if you try to argue about it!

> and will happily tell you to go pound sound if you try to argue about it!

Perhaps it's better to leave a review about deceptive pricing on Google Maps, TripAdvisor, etc.

Last time I stayed in Vegas, they did charge a resort fee, but it was disclosed at the time of booking (hotels.com).

Still think it’s sleezy, but it wasn’t a surprise at least

Not including sales tax kind of makes sense, because it varies so much state to state (and often within the state). This allows companies to advertise one price nationwide.

> This allows companies to advertise one price nationwide.

I think most stores prints their pricing labels locally.

Maybe, there could be a case for national TV to be exempt.

But for prices listed in a store, on a menu card, I don't see any excuse.

When was the last time we found same hotel prices across states or counties? Oh it is 300$ plus tax in new York and it is 300 inclusive in Philly but ... I am not going to Philly. McDonald's maybe but not a hotel since so much depends on the location and amenities.

Some cities range across counties. Some cities have taxes that the county itself doesn't, so literally crossing the street into the unincorporated part of town can save you on sales tax. Sometimes sales tax is suspended based on who you are. Sometimes sales tax is suspended on what time of year it is.

Sales tax is complicated. I get why companies would rather outsource that to the register to look up at the end.

Meanwhile, just about every other place except USA seem to function just fine with taxes included in prices.

It's usually because they don't allow localities to add sales taxes. Here in Japan, sales tax is 10%, everywhere (except for groceries, which is 8%). You don't have to worry about an extra 0.5% from some municipality; it's the same everywhere.

The US gives way too much control to local governments.

Surely your inventory/POS systems need to know what price/tax rates to charge anyway. I understand your point in the context of an ad in a magazine offering a good at a particular price, but I don't think it makes sense at all in the context of a store with tickets on items that don't actually correspond to the price at the till.

You could set the same price, and then your actual revenue would vary state-to-state.

European companies sometimes have a "No VAT" promotion, which of course doesn't actually mean "No VAT", merely that prices are reduced by what VAT usually is.

Does having different levels of tax between states, and between municipalities within those states, actually benefit the public?

I just don’t see how this is better than literally every other country in the world which sets sales tax at the federal level.

And please don’t hit me with ridiculous hypotheticals “if it’s set at the federal level, the government could just increase the tax to 7000 billion trillion percent to steal everyone’s money”.

It's because the feds actually don't have any sales tax. Sales tax is set at State level (unless you live in Alaska, Delaware, Montana, New Hampshire or Oregon).

Then the County you live in can levy a sales tax. This is to serve the people who live in unincorporated places.

Lastly, Cities levy a sales tax.

So yea, it really isn't that simple in the USA.

Hell, how many countries do you know that have different income taxes based on where they live?

> So yea, it really isn't that simple in the USA

It isn’t that simple in the USA. Yet it literally is that simple in every other country in the world.

I don’t understand why the average American has such main character syndrome that they genuinely believe their country is so unique that they are unable to solve problems every other country in the world has solved. Ridiculous.

Do you understand what USA means? United States, it is a union of independent states. It's like you asking why all countries in the European Union doesn't have the same taxes or why all countries in Africa don't have the same taxes.

Canada has a federal tax but in some provinces it is combined with the provincial sales tax and in other provinces there is a separate tax (or none in Alberta) so the USA is not the only federation with disparate tax regimes.

It's a feature not a bug that states can charge different sales tax rates..

Really? Taxes in France are exactly the same as in Switzerland?

States in the US are analogous to countries in the rest of the world.

> States in the US are analogous to countries in the rest of the world.

But they aren’t. States are states, it’s literally in the name. Almost all countries in the world have states or an analogy to states.

Again, only an American would consider each of the United States as seperate countries. Totally disconnected from reality.

Many countries do not, in fact, have lower-level sovereignties with general powers with selective negative limits and a top level sovereign with limited, positive powers.

Very many countries are more like many US states are with their subordinate counties: that is, a top level sovereign with general powers and negative limits with subordinate non-sovereign entities with limited positive powers granted by the top-level sovereigns.

The United Kingdom, which unlike the United States is quite literally comprised of different countries, has managed to solve this problem.

Australia also has a similar setup to the USA, and has also managed to solve this problem.

I don’t know the inner workings of every country, but I assume there are more in the same position.

I’m sorry, but the USA is not in some crazy unique position that no other country has ever faced before. You just choose believe this inaccuracy.

> The United Kingdom, which unlike the United States is quite literally comprised of different countries

"State" is the usual legal term for sovereign juridical entities with territory, while "country" is a less formal term that often corresponds to a state.

(And the "countries" that make up the UK aren't sovereign even in theory, though some of them have some degree of home rule granted by the central sovereign.)

> the USA is not in some crazy unique position

Unique? No.

But common? Also no.

And it structurally does make solving some problems quite hard, and it makes changing the structure to resolve those problems also hard.

> Almost all countries in the world have states or an analogy to states.

Only 27 countries in the world are federal states, which is a very far cry from "almost all countries." The entire notion of a federal state is that both the federal government and the state government have independent loci of powers, and there are times when the state governments can tell the federal government to fuck off if the federal government wants it to do something. The exact degree to which this is possible varies from country to country.

For example, you seem to be comparing the US to the UK. But Scotland is not like a US state--it has far fewer powers than a US state, and what powers it does have is entirely dependent on what the UK parliament is willing to grant it. So trying to draw an analogue between a US state and a partially-devolved country within the UK is itself a mistake.

All the largest nations in the world are federations: Russia, Canada, United States, Brazil, Australia. You have to understand history and realpolitik.

> So yea, it really isn't that simple in the USA.

German VAT is also not simple. Before we had a temporary (so another layer of madness) law change, you either paid 19% VAT or 7% VAT, depending on whether you ordered your food to go or sat down at a restaurant. So the same item, for the same person would be taxed at a different rate depending on whether that person walks out with the food or carries it to a table. The restaurants simply advertise a single price and eat the difference [1]. Or to be more precise: the different tax values are priced into the single price, potentially accounting for the rough split between dine-in/takeout orders.

Despite all of this madness, we see a single price at the menu, we can pay exactly that price, and for takeout it actually is not uncommon to actually pay exactly that price. No sales tax, mandatory surcharges or gratuity, just a single, final price.

As for differences in the income needs of the counties/municipalities: this is handled with taxes on the profit of companies based in that area [2]. So the consumer never sees the differences in taxes, accounting is pushed to companies. If McD wants to advertise a fixed price nationwide, their franchisees need to eat the difference.

I get that in the US the states are more like countries in the EU, but we still manage to have the same VAT in all of Germany while apparently US sales tax can vary on the city level.

[1] there are exceptions, e.g. explicit to-go foods are advertised as such [2] there are more ways for this, but this is, IMO, the most similar way to the local sales tax in the US

If the federal government set the tax, the states and cities wouldn’t get any of it.

So using your logic, in almost every other country in the world where sales tax is set at the federal level, states/counties/equivilant/cities don’t get tax money.

Do you genuinely believe this, have you done any research, and are you happy to stick with this argument?

It can also vary street to street, due to intersecting county and municipal lines, and based on time, e.g. tax brackets that change depending on sales volume or special taxes on certain items.

Still, every one of those stores knows exactly, down to the penny, what to charge me when I checkout. This isn't rocket science. Stores just won't do it unless forced to because if I put taxes in my prices, the store down the street won't and will "look" cheaper.

> every one of those stores knows exactly, down to the penny, what to charge me when I checkout

The resounding misunderstanding is their customers don’t care. I didn’t notice all-inclusive prices until a German friend pointed it out to me. I grew up, in part, in Europe!

Also, no, they may not. Not before you buy. Some counties in America vary their taxes marginally. That means your tax rate on some product today could be different from tomorrow, based on that store’s sales.

Yeah, what the above says

I also don’t hate the side effect that it somewhat points out to you that it’s the govt taking a cut

It sure is nice in most of the rest of the developed world to buy a product or service and immediately know how many dollars have to go from me to them because it’s the one price, though.

> I also don’t hate the side effect that it somewhat points out to you that it’s the govt taking a cut

In every place I have been to, the receipt or invoice has a line item saying how much tax was payable on the transaction. Not least so that business customers can reclaim VAT in countries that have VAT. Different items also often have different tax rates, which is especially noticeable at somewhere like a supermarket where you might buy food, other goods, and alcohol in one transaction.

Sure, of course it does. How often do you look at it, and think through what portion is actually going to the business? Tax-not-included prices do that automatically.

> I also don't understand the US practice of not including relevant sales tax charges in the cost of a good.

Here in Canada too, but I don't mind. When I feel the pain in my wallet, I want to know where to direct my bitterness. Credit card processing fees should be broken out too IMO.

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