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Comment by a2128 | Hacker News Reader

Whenever I visit the US I get annoyed that the prices listed on the store shelves aren't actually what I pay; in Europe all prices are VAT-inclusive, but in the US none of the prices include sales tax, they're all broken out separately at checkout.

I found this unreasonable and confusing until one day I read a conservative argument that this is actually a good thing, because it stops the government from increasing sales tax too much. It constantly reminds residents of how much extra they're paying for sales tax and encourages voting for politicians who will reduce sales tax if it's too high. Okay, it's a reasonable argument, I wasn't super against it anymore.

It's fairly shocking to now see this happen, not even as a result of any law but just one of the biggest companies deciding to obey in advance.

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He is correct too. Compare tax rates in the European continent to the USA. US taxes are much lower. Some states, like New Hampshire, have 0 sales tax. So if you buy something that costs a dollar, you actually pay a dollar. Not 1.06 like in Pennnsylvania, or a whopping 1.27 like in Hungary.

https://upload.wikimedia.org/wikipedia/commons/1/1f/EU_VAT_T...

https://upload.wikimedia.org/wikipedia/commons/8/8b/Sales_ta...

States with a low sales tax tend to have high property taxes.

Apparently the New Hampshire median home price is 487K. With a property tax of 1.89% that's 9.2K/yr or $767 per month.

EU property taxes are a fraction of that: https://taxfoundation.org/data/all/eu/real-property-taxes-eu...

Overall, Europeans do pay higher taxes but Americans really overlook how much property tax they pay, and how this closes the gap significantly.

i hated it at first, but then started to appreciate how it gives visibility on the cost of senator salaries and the military.

US Senators make $193,400 per year and there are 100 of them. This ~20mil doesn't exactly stack up to the ~1.8 trillion of US government discretionary spending (or ~4 trillion of 'mandatory' spending).

the salaries are the least expensive part of their cost.

It doesn't really as our minds can't truly comprehend the population or volume of goods sold. Without that it's meaningless.

excellent point. but it's a start

That conservative argument is just an excuse. The price is not shown in full, to make it harder for customer to know how much they are spending before they are at the counter.

It is fully possible to show full price along with tariffs and taxes, if you want to show them. It does not necessitates misleading prices. This is just conservatives being pro-manipulation and against informed customers.

When I was ordering package to a country that had tariffs, an online store shown me item price, shipping, tariffs and total price. Nothing new or shocking about showing a full price along with its breakdown.

How do you show the final price to someone when dining in and carrying out food have different tax rates? You won’t know the price until they complete the purchase.

How do you put the final price on an ad that will be broadcast over a large area or distributed in a newspaper that goes to same, with different tax rates in different parts of the area? You won’t know the price until you know which location they’re shopping at.

> How do you show the final price to someone when dining in and carrying out food have different tax rates?

I show two prices. Or, I show price for food and then price for packing separately. This is not a difficult problem at all.

>ow do you put the final price on an ad that will be broadcast over a large area or distributed in a newspaper that goes to same, with different tax rates in different parts of the area?

Are we now in some kind of completely different hypothetical example that is neither online shopping nor "prices in the store" we discussed before?

What they’re getting at is not applying tax to the price is the standard consistent way to show price in the US. If you have a national ad campaign you wouldn’t be able to show the price with tax because every state and city has their own tax rate. So then, as a consumer, you’d have to guess if you’re looking at a national ad or regional that has tax applied. This also applies to products that have their price printed on the packaging for national distribution. Sure the price could have fine print that says if tax is included or not, but now there’s more than one way to display price — even in a store. See: https://xkcd.com/927

You simplify the tax code so that, like the vast majority of other developed nations, these situations do not apply.

However that requires a centralization of power that is politically unpalatable in the US currently.

In practice, I think that this issue largely persists in the US because of tipping culture though. It perpetuates an acceptance of final cost uncertainty that makes the insanity of all the examples you describe seem somehow not so weird after all.

> found this unreasonable and confusing until one day I read a conservative argument that this is actually a good thing, because it stops the government from increasing sales tax too much. It constantly reminds residents of how much extra they're paying for sales tax and encourages voting for politicians who will reduce sales tax if it's too high. Okay, it's a reasonable argument, I wasn't super against it anymore

It's not really reasonable. Like, at all.

You can know how much sales tax/VAT is without having to do math every time you pay a bill. For one thing, receipts can and AFAIK always include VAT separately in the EU, with a line for each VAT amount if different (e.g. in France food and alcohol are under different VAT rates, so on the receipt it says you paid X in VAT, of which Y was under 20% for alcohol, Z under 5.5% for food).

You retain the same "power" while being more informed and you're spared quick mental math every time you pay.

The question is not whether the person can see the vat. It's whether they are actively confronted with it. I actually found the argument extremely convincing as a euro person. Now I would like to see separate VAT here too.

It's psychology. Just like withholding taxes on salaries before they are paid.

That's more about forcing people to manage their cashflow and not giving them the opportunity to not pay the income tax.

Whatever you say... Some countries even hide the labour tax from the pay slips, meaning most salaried people believe they pay much less in tax than what they actually do.

Which country? This makes no sense. The UK payslip is entirely for the purpose of displaying before tax, deductions, and post-tax salary. It's a PAYE receipt, effectively.

Nordic countries do this. They call it an "employment fee", which is calculated on your salary and does not show up on your pay slip. It is quite sustainable as well. Of course you also have your "normal" income tax, which is withheld from you before payment and shows up on your pay slip. Also quite sustainable.

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