The tax exclusive prices lets you know how much the government is soaking you, rather than hiding it and blaming it on the business.
Seriously. I don't care if the total price consists of 100% tax or 0% tax. I care only what it is. I don't ask to know how much you pay the cleaners, how much it costs to operate the pool, how much corporate profit you're booking, or how much the CFO is embezzling. The amount of tax is equally useless to me. I care what it costs me.
Look at us poor Europeans with our metric-system money-math
Not if you are voting someone in a political office in the next election.
This is because employers have no interest in what your paycheck amount is. They care about "total compensation", which is what it costs the employer to employ you. Seattle added some "payroll taxes" and successfully sold the fiction that it was the businesses paying it. The businesses did indeed write the check, but it was the employee's money.
In the US, a lot of people think of tax day as a "good day" because they get a refund from the government! Psychologically it is very different if you steal the money before they even see it than take it from them once they have felt it under their tongue.
Plus, I think the OP is referring to money that is technically paid by the employer but effectively passed through to the employee, because that's what happens, not some item on their payslip.
I care about what effects the policies are having, not how much I pay in taxes. The impact of the policies is what actually matters. The tax rate is one tiny detail. I'm not wired to automatically assume collective action is evil, so I only care about it in the context of the effects of all policies combined.
I would very much blame the business for leaving out tax, concealing how much I'll need to pay to try to get me to overspend. Businesses claiming they don't want to be blamed for sales tax existing seems like misdirection from the real reason: it makes it look like you're spending less.
When a tax hike happens, businesses don't automatically have to increase prices they charge by the same amount: they can take a hit to their margin instead. So, the price they choose to charge is not "price + tax". It is "supply-and-demand price, of which we pay X to the state in taxes".
> they can take a hit to their margin instead
Not for long. Low margin businesses tend to go out of business. And if you can earn 5% buying bonds, why run a business that has an ROI of 4%?
Of course, if businesses actually set prices as cost + margin, then it does make sense to separate tax from the price, as the value "price before tax" is a meaningful part of the price setting algorithm.
And lowering your margin is not the same thing as running a low margin business. If your margin was 20% at a tax level of 10%, and taxes go to 15%, then reducing your margin to 18% doesn't make you a low margin business now. Regardless, if you believe in supply and demand as the sole mechanism for price setting, this is all moot: the state increasing taxes won't increase demand or reduce supply with the exact same level as the tax increase, so the price can't move the exact same as the tax increase in this model.
I'd also note that it's not strictly true that taxes are completely decoupled from supply & demand. States do compete on attracting businesses through lower taxation.
That's correct.
> So the tax level is irrelevant to the value of the market price, if you believe in supply & demand as the price setting mechanism.
Taxes raise the price, which reduces demand. If the prices don't rise, then the margins decrease, which reduces the incentive for the business owners to continue.
> doesn't make you a low margin business
It makes you a lower margin business. It reduces the margins on all the businesses, and the marginal (!) ones are no longer viable, and a new set of businesses become at the edge.