The Gap Between the Price You See and What You Pay Is Getting Worse
wsj.com
wsj.com
Having grown up in Europe where tax is included on the label I still knew I was paying VAT and I knew the percentage amount of it, everyone did. If I picked up a €5 item and was charged anything other than €5 at the checkout I’d know something fishy was going on. But in the US it’s always been easy to tack on a little 20c fee here, a 50c one there… this is just the inevitable escalation where apps like Uber Eats bundle together $12 of “taxes and fees” to mask their obscene cut.
It's absolutely irritating, almost everything feels like a bait and switch.
US corporations are pretty good at breaking laws and making it a cost of doing business.
I always understood it to be the opposite- so that the varying price for the same thing by location was hidden from consumers.
A nationwide chain can advertise that a product is $X, even though their customers will pay anywhere from zero additional tax (Alaska, Delaware) to over 11% additional tax (California, Arizona, Illinois). See https://www.avalara.com/taxrates/en/state-rates.html for how widely it can range by location.
A Sandwich: Sales tax and tip or service fee (the latter being taxed)
Car: KBB is a thing, but how much work does it take to get that, how much of a discount is the craigslist rando going to ask, are those tires good or fair?
House: Put the Zillow estimate in one hand and the inch-thick stack of paper that describes all the gotchas in buying or selling one in the other...
401k: There's an official number on that one, but it changes every 15 minutes, has 30% taxes if you take it early, and how do you figure the odds of living long enough to use it?
Mortgage: Another official number, but try sending them a check for that number and you'll find you owe them a little more for the interest that happened while the check was in flight, plus fees if it's in the fine print.
Salary: After taxes, deductions, bonuses, unicorn dust, what it says on your W-2 isn't even close to your alleged salary, nor is the amount that makes it to your checking account.
"Ah, but that's actual cash in my checking account," you smile, "as is this crisp fiver I clutch in my very hand."
Except it's not, because you're a dinosaur and your idea of a fiver was forged in an ancient time when it could buy a whole chicken or a sack of potatoes, depending on the day of the week, and what sales were on, so what you've got there is really a three-er.
the fees are still there, but 1% of $10 stings a lot less than 1% of $100
He's right about the junk fees. When you buy something the state and federal taxes are not advertised in the price.
"Junk fees are hidden, surprise fees that companies sneak onto customer bills"
> But if you order food for $100 and there is a $20 delivery cost, and then a $5 delivery "fee" on top of the actual delivery cost, then it does smell like hiding a cost in a "junk fee".
Its not hidden unless its hidden, note.
But what you usually get where I live, besides the "delivery fee" and the tip, is an additional surcharge on each individual item. This is not visible because it's included with the price of the item. To figure it out you have to compare the app's menu with the real restaurant's menu.
The delivery is the service
Doubly so when the food itself is priced higher in the app, you're getting double delivery fee'd.
For me the most annoying examples are with flights aggregators who more often than not do a shameless bait and switch. Advertise the price as X, but once the checkout process begins it's actually much more.