Nobody's trying to fool you by not including sales taxes. There's just no way to show them in advance, unless you want to start typing your address and zip code into every shopping website before you even browse.
If I'm signed in to the shop from making a previous purchase, they will use the location of the previous purchase.
But this isn't about Denmark -- it is about the US.
In the US, there are over 13,000 different sales tax jurisdictions, and each one of them may have a different tax rate.
I wish the best to anyone who would ever be tasked with sorting that out with any semblance of accuracy using IP geolocation databases.
Just a thought...
Nationally (or as some may prefer, "federallly"), the sales tax rate is already zero -- and has always been zero.
To add on for any else trying to figure out the 13k number from this statement.
Counties can also apply their own additional taxes.
Cities can also apply their own additional taxes.
On top of just that, the cities and counties can set different taxes in the same area, such as a sugar tax or an alcohol tax or even a pre-prepared food tax vs groceries. It gets complicated fast.
per state, I understand the tax. set it per state, and be done with it. maybe split it in some % with the city (I don't know if cities directly get a portion of it already or not?), so it's a win-win.
But even assuming "good enough" IP geolocation exists: In order for this to be implemented both uniformly and nationally, we'd need a new constitutional amendment that would grant the federal government the ability to regulate how sales taxes work within states.
Because right now, we have this: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
Items I order at home are subject to a 7.25% sales tax rate.
My neighbor across the street (our front doors are maybe 80 feet apart) pays 6.75%.
We both live in the same zip code. We both live within the same city. We both live in the same school district. We each live in two different counties.
(And up the road a bit, a third county is involved instead.)
But some cities have their own sales taxes in addition to (or instead of) county sales taxes, so county alone isn't good enough.
Besides, there's literally 30 different counties in the US named "Hancock".
(If this were an easy problem to solve it'd have been solved a long time ago.)
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I think we're already back to where we started, wherein: In order to display an accurate sales tax, we need to know the address, city, and state of the buyer.
It is my considered opinion that it is all quite resoundingly fucked.
There's a very small % of traffic that actually uses VPNs
Remember, sales tax isn't something big like state-level. It's literally town-level, including tiny towns. Two sides of the same street can have a different sales tax.
Not to mention all the extra rules, such as individual clothing items under $110 being exempt in New York.
You know where you live, you know what your local sales tax is. The current system works fine.
> You know where you live, you know what your local sales tax is.
No, I in fact don't know, because I have better things to do than to keep up with what my city and state have extended sales tax to this month, what carveouts exist ("no sales tax on unhealthy snacks except ice cream" and stuff like that) etc.
And there is absolutely no excuse for in-person stores that do, in fact, have perfect a priori knowledge of all of this.
By your logic I shouldn’t have to pay income tax on sales because my customers already paid income tax. We could simply the whole thing by just making dollar bills worth $0.66.
People often believe that because something has been for a while, it must always be so. Not too long ago we didn't have sales tax (introduced in the 1950's), and things were fine.
You are taxed on your income, and you are taxed on your expenses. If you invest that money or do anything productive with it, it gets taxed again. That's such a ridiculous idea - pick one and stick with it. Make it whatever percentage it needs to be, and that's it.
When someone looks at their bank account - that ought to be the final word on how much purchasing power that individual has. It shouldn't be handwavy minus 7-12%.
Mind you, that's 7-12% in addition to the 20-30% you already paid.
I’d love to abolish regressive sales taxes and return to 1950s level progressive income tax rates. You have my vote.
The idea of "Paying what you can afford" is BS everywhere it's been implemented - from school tuition to soccer camp to taxes. Everyone feels burned and like the "others" aren't paying what they should be.
Federal taxes should be a flat percentage, no deductions, no credits, no so-called "loop holes"... nothing. Every citizen pays the same percentage (whatever it needs to be).
The incumbent tax apparatus would never allow us to have something so simple, though.
For a nation that got it's start in no small part due to being over-taxed, it's very interesting to see just how much tax shenanigans we tolerate today.
> Progressive income tax is also silly. Just because you earn more money than someone else doesn't mean you derive more benefits from the government.
I think "pay what you can afford" is fair because the only way to make half a million dollars (or more) a year is to disproportionately reap the benefits of society. Marginal income tax is fair in the sense that everyone does pay the same. Your $11,001st dollar is taxed the same as everyone else, just like your $578,126th dollar. If you don't want to pay the highest rates then take advantage of deductions (aka incentives aka loopholes) and invest in creating jobs.
> Everyone feels burned and like the "others" aren't paying what they should be.
I definitely don't feel this way and I am happy to pay my marginal rates. I just don't think they go far enough.
> Federal taxes should be a flat percentage, no deductions, no credits, no so-called "loop holes"... nothing. Every citizen pays the same percentage (whatever it needs to be).
Do you propose a flat income tax or a flat wealth tax? Should capital gains be taxed as income?
> For a nation that got it's start in no small part due to being over-taxed, it's very interesting to see just how much tax shenanigans we tolerate today.
My understanding was that the issue was lack of representation or ability to levy local taxes but I admit my knowledge of that point in history is weak. The America of today is certainly different from revolutionary times. I would say it is better.
This is where we fundamentally disagree.
You buy products because you want/like them. The people who make them are not disproportionately reaping benefits of society - they are reaping benefits of creating productive and desirable products.
This view flirts with the idea that people "extract" wealth from the public, and that people are taken advantage of and/or manipulated into buying things.
> I definitely don't feel this way and I am happy to pay my marginal rates. I just don't think they go far enough.
People universally feel the government (local, state, federal) overwhelmingly wastes their tax money - yet so many people demand others pay more of their earned income to this uncaring ineffective machine. Tax receipts will never be enough for the government, and some people will continue to advocate plowing more of other people's money into the dark abyss. That's madness.
> Do you propose a flat income tax or a flat wealth tax? Should capital gains be taxed as income?
I propose a straight flat income tax percentage, without any deductions, credits, anything. While the percentage is fixed, the dollar amount obviously scales with income. Things like capital gains are solved this way by taxing the actual income you generated from the investments.
I'm making up numbers, but say it's 20%. No matter if you earned $1 of income, or $1,000,000 - you pay 20%.
A flat tax of 20% would be ruinous to the poor and lower middle class. That can’t be sustained without an enormous increase in income or some guarantees around living expenses.
If I understand your definition of flat tax then capital gains would be untaxed as well so the wealthiest would pay even less.
I understand the ideology. Taxes should be simple and equal. I just don’t think that ideology is worth defending. The price is too high when the benefits are so unclear.
This is a very problematic view of the world, and is not in line with reality.
The people who earn $10MM a year make decisions that impact the lives of thousands (10's of thousands, or 100's of thousands) of employees. They are usually also directly responsible for millions of dollars in salaries every month.
The myth that executives running a business don't earn their pay is silly.
> A flat tax of 20% would be ruinous to the poor and lower middle class.
Also not true even a little bit. Most of the lower and middle class already pay more than 20%.
But those decisions are worthless without people to carry them out.
> They are usually also directly responsible for millions of dollars in salaries every month.
So what? The salaries may add up to millions but what’s the denominator? This doesn’t justify a 100x multiplier on earnings.
> Also not true even a little bit. Most of the lower and middle class already pay more than 20%.
Are you including sales, property, and state income tax?
Median income in the US is $80,610.00. The effective federal income tax rate at that income level is 16.23% but that assumes no deductions. In reality the median earner is going to take the standard deduction for $13,850.00 so they’re only going to pay federal income tax on $66,760.00 so their effective rate is 15.04%. This doesn’t consider student loan payments, mortgage interest deductions, or retirement account contributions, which will further lower the effective rate.
This is for the median income. For lower incomes the effect is even more dramatic.
So the only way most of the lower and middle class pay more than 20% is if you count all taxes paid. But that means for your flat 20%-no-deductions tax to be a better deal it has to come with an abolition of all other taxes.
If so how do municipalities get funding? Does it all come from the federal government?
Ok...
> Federal taxes should be a flat percentage, no deductions, no credits, no so-called "loop holes"... nothing. Every citizen pays the same percentage (whatever it needs to be).
Flat percentage? A flat percentage means that if you earn N times what someone else earns you pay N times as much tax as they do.
But you just said a couple of paragraphs earlier that just because you earn more money that someone else doesn't mean you derive more benefits from the government. If that's going to be the basis of your tax policy shouldn't the tax be a flat amount?
Alice makes $10 million/year, so her tax is $1 million/year.
Bob makes $20 000/year, so his tax is $2 000/year.
Alice and Bob get the same benefits from the government so what is the justification for her tax being 500 times as much as Bob's?
I happen to think a flat percentage without deductions or credits is the best compromise with the people who think everyone else isn't paying their "fair share". If everyone pays this 10% (or whatever) then there's no quibbling about this or that deduction or tax shenanigan (buying art, etc).
The big argument for a progressive rate over a fixed rate is that 10% from someone making $15 000 has a much bigger impact on their lifestyle than 10% from someone making $15 000 000.
With no deductions and credits 10% on $15 000, especially for someone with kids, can mean the tax is coming from money that otherwise would have went toward basic things like food and heat and healthcare.
That's why nearly every serious flat rate tax proposal I've seen includes some kind of exemption so that tax is actually only on the income over that threshold. But once you do that it is now a progressive tax with two brackets.
Well, no, it isn’t. Consider the Oregon/Washington border. An IP could bounce around there. Oregon has zero sales tax so the pre-tax price is literally correct for Oregon residents. Adding estimated tax will be less accurate.
Similarly I could live in unincorporated King County such as White Center and not be subject to Seattle tax while still being subject to King County and Washington tax even though the other side of the street is Seattle.
There’s a sugary drink tax in Seattle. The border is Roxbury. There’s a 7/11 on Roxbury in White Center. Should a 7/11 sandwich board on the Seattle side of the street across from that 7/11 advertise the price with or without that tax?
This is at a merchant that, to say it lightly, has some prior knowledge of me and even has a drop-down menu to let me select the shipping destination out of my saved ones.
So far, that's only used for determining shipping times and availabilities – so why not also display amounts post-tax?
What about a grocery store on the Oregon/Idaho border? Idaho charges sales tax to residents but that can be waived with an Oregon ID. Should this be reflected in the advertised price?
And what about billboard or TV advertisements or even banner ads on a webpage?
I don't care, to be honest. If the merchant knows I can definitely get the cheaper rate without jumping through extra hoops, I don't see a problem in showing the lower price.
> What about a grocery store on the Oregon/Idaho border? Idaho charges sales tax to residents but that can be waived with an Oregon ID. Should this be reflected in the advertised price?
Wow, really? Fascinating/frustrating! There's always one more layer, I guess. Maybe... show two prices then? (I've seen this in duty free stores: Sometimes there's a "with international boarding pass only" price.)
> And what about billboard or TV advertisements or even banner ads on a webpage?
That seems like a case where I'd be fine with the net price being displayed. And yeah, I realize that then all other stores would be screaming unfair discrimination because people will compare the competition's flyer price to the in-store label price and everything...
Maybe the only solution really is to simplify the horror that is US sales tax, and that's obviously never happening. Think of all the jobs in tax preparation and software...
But that discount is contingent on what you might add to your cart in the future and the shipping options you choose. Items can have complex interactions when purchased together. This isn’t just tax. It’s shipping, discounts, gift wrap, and coupons. All of which are taxed and possibly at different rates. You have the luxury of not caring. The merchant doesn’t.
> Wow, really? Fascinating/frustrating!
That’s a tame example. If I buy a car in Oregon where there’s no sales tax I still might have to pay Washington use tax to get plates. This is still the case if I buy the car in Miami, or Toronto. So how does advertising work in that situation?
https://dor.wa.gov/forms-publications/publications-subject/t...
> Maybe the only solution really is to simplify the horror that is US sales tax, and that's obviously never happening. Think of all the jobs in tax preparation and software...
Our complex tax codes are not a conspiracy to create jobs in tax prep. The right to levy our own taxes was a primary motivation of the revolution. In our system of government power is decentralized. That means individual states, counties, and towns can charge their own taxes.
Say my city votes to provide free residential broadband to residents and fund it with a telco tax on private ISP service.
“Simplifying” the tax code by just not allowing the city to do that is literally antithetical to our society. It’s an undermining of the laboratory of democracy.
That may sound hyperbolic but “I find this complexity confusing” just isn’t a compelling argument for kneecapping our democracy.
Make everything as simple as possible but no simpler.
But that's already the case today. I see the price per item, not counting any potential bulk rebates or optional coupon codes, as it's not a priori clear what else I'll buy. On the other hand, sales tax can always be calculated per item sold, as far as I know.
> Say my city votes to provide free residential broadband to residents and fund it with a telco tax on private ISP service.
> “Simplifying” the tax code by just not allowing the city to do that is literally antithetical to our society. It’s an undermining of the laboratory of democracy.
That argument does make some sense to me, but there are many other types of taxes cities and states could levy other than sales tax, which is extraordinarily complicated as you've demonstrated.
> Our complex tax codes are not a conspiracy to create jobs in tax prep. [...] Make everything as simple as possible but no simpler.
I agree, but also given the incentives here, I'd be surprised if that industry wouldn't put up heavy opposition if anybody seriously campaigned to simplify sales tax while avoiding the reduced autonomy/decentralization you mention. I'm all for avoiding Chesterton's Fence, but taking that way of thinking too far can cement the status quo beyond what's useful and resonable in many cases.
That’s fair. I guess I just don’t see the value in displaying the per-item tax when there’s still a bunch of other unknowable charges. But I agree, as far as I understand it would be possible to show the per-item price with sales tax.
But my experience with tax is that it’s always more complicated than you expect, even when you think it’s more complicated than you expect.
Is North America unique in allowing local municipalities to set their own taxes?
> It's really not a crazy concept - estimate it based on geolocation and say "more exact will be available once you enter your address".
That’s exactly what happens now, except the advertised price is actually correct instead of an “estimate”. I have an intuitive sense for local tax. How can I know what method was used to compute this estimated price?
Anyways, all I was saying that it's a solved UX problem, and the reason why you're not getting full price is because A/B testing has shown that when customers see the complete price, they get a shock and less likely to buy the item. This doesn't have much to do with websites caring about some edge cases that they'll somehow won't be able to give out exact price to you. In the worst case, the shopping websites could ask you to enter your postal code and show all prices with the tax included price.
Municipal taxes are not an edgecase in the United States at least. They’re very much the norm, especially in telecommunications.
It's not that NA is the only one susceptible to A/B testing. It's more of a - it's-grey-area-to-illegal to not show full prices outside of NA.
In terms of gaming, hmm… I guess, you could add wrong municipality’s taxes when you show the original price, and switch over at the checkout. But my assumption is that would be deemed illegal, as you are knowingly misleading the customer. Some in person stores still try a bit to mislead you by putting the full price in smaller font (like including the consumption tax), and exclude it over it in the bigger font. But I can still accept that, as I am informed about the full price somehow.
What is displayed for price before you put in postal code? What price do generic banner or TV ads display?
What you describe sounds like the same thing that happens in the US. So what's special about Australia, Japan, and Denmark as you stated earlier?
It actually happens in NA for specific industries as well! If you buy a flight from Google flights without making any additional purchases, you will get the sticker price because airfare display is regulated to a certain degree. Except in Japan and other countries, almost all display prices have to include local taxes. It’s a solved problem, but there’s no political appetite for it in US/Canada because it will hurt the sales.
> Because according to Japanese law, in most of the scenarios, the full price, to your best ability, has to be presented to the potential customer.
I agree, there are a lot of cases where they don't show the full prices. Especially in the recent years when they've been changing the consumption tax rapidly, and allowing shops to have some leeway. But online prices, almost everywhere, include tax. Even Shopify forces JP merchants to display them while selling in the area.
I can totally image a PM somewhere calculate the negative bps for this and call the experiment a failure!
I appreciate this can be done and countries in Europe do it, I just don't see how this is any better at all than status quo:
* Current State: we all know the quoted price doesn't include sales tax, which will be added to make the final price in checkout after we enter our address.
* Final State: we all know the quoted price will likely change during checkout, when we see the final price after we enter our address.
So we make things more complicated for vendors, and we make it not just acceptable but required that vendors use our IP addresses for geolocation, only to give us a maybe-right-maybe-wrong final price. Does anyone feel scammed by not having tax included on the price in the listings of Macy's online store?
I'm not sure why one wouldn't want to know the real price before the checkout. It's a bit baffling to me. It could be a cultural thing as well, then I guess, there isn't really a right or wrong way of looking at it.
Sure, in a world where the actual sticker price is displayed. Do you believe this will remain true when customers have to add items to the cart to get the “real” price?
It's just that, in the list of things I'd like fixed about the world, that's about dead last.
When you're used to sales tax being added at the register, it's not an inconvenience. Who cares.
Because you'd never actually know if it's the final real price or not until you entered your address! That's the entire premise of my objection, was that not clear?
If we want to talk about displaying final price for my confirmed shipping address then yeah, I'm all in for that.
Finding out your teenage daughter is pregnant based on her shopping is easy. It’s actually harder not to notice. “Customers like you also bought” is an effective algorithm because people are mostly the same. Pregnancy has some very specific and unique needs which create a strong signal.
Nobody is in a shady back room poring over chat logs and GPS coordinates looking for pregnant teenagers. It just falls out of the sysem.
That said, I DO agree that hidden facility/resort/etc. fees and the like should go. For years, there was a conference center restoration fee tacked onto hotels all over NYC even the project wasn't even approved. Rental cars at airports are also a nightmare. There is no reason for them.
Usually (across the world and across history) the power of taxation is very jealously guarded, and local government is usually only allowed to gather a limited range of taxes. Historically sovereigns have treated attempts by subordinates to raise their own taxes as tantamount to treason.
You haven't given any reason why not.
And sales tax is one of a limited range of taxes.