Sunday, July 1, 2007

Taxing on the brain

My buddy who is currently in San Diego wrote the other day about his dislike for the American way of incorporating sales tax into their prices...they just don't.

For example if you go into a shop and see a nice deal like "coffee + muffin = $2" (which I did) guess what, its not two American dollars. Once you get to the till, they will give you the price with tax added AFTER the display price. (when quizzed about it the sales assistant told me "we dont display the full price becasue if we did no one would buy it")
In fact the only place I found that were decent enough to add in tax were the hotdog stands by the side of the road in New York, god bless those weiner men.

The practice of not factoring tax into the display price strikes me as being particularly and inexcusably lazy. In Ireland for example, when determining the sale price of a product, the retailer has to be aware of how much revenue will actually be made by the sale of the unit, a €1.50 bottle of coke will only really give them €1.18. In our system the retailer takes on the burden of factoring the tax into pricing, Seems in America most retailers are happy to leave the confusion, effort and inconvenience on the customers side...nice.

6 comments:

Anonymous said...

I disagree. It makes you more aware of how much tax you are paying.

ed said...

Yeh, but that has nothing to do with the parts I'm arguing, in terms of convinience and effort and general crappyness of having a fistful of change in your pocket, the US sytem is a joke. and calculating 1/5 of the price is essentially tax here (21%)...not so hard

jedimasterbooboo said...

More aware of the tax I'm paying? Uh, what, where? In fantasy land? I don't live there. We make a mental guestimation, and the sellers know we do it. If anon were right, then NOTHING would have those silly 6.99 and 7.99 prices. The mind is interesting that way. Here in the Philippines in most places, the price is the price. It's pretty cool. I thought this was a pretty interesting blog entry, I was born in San Diego. As far as the worker saying "nobody would buy it", that's pretty lame on her part, but...I hope he's enjoying America anyway. We're total suckers for any European accent, so maybe he's had some good experiences related to that, I hope so.

David said...

Anon is right, not including sales tax in price definitely does make people more aware of tax levels.

In Ireland the government makes almost exactly the same revenue from indirect taxes as they do from direct taxes. This has been done on purpose because the public don't realise when they're paying indirect taxes and so don't complain when they go up.

Hence why our VAT is 21% where as in canada they pay a lot less.

David said...

Anon is right, not including sales tax in price definitely does make people more aware of tax levels.

In Ireland the government makes almost exactly the same revenue from indirect taxes as they do from direct taxes. This has been done on purpose because the public don't realise when they're paying indirect taxes and so don't complain when they go up.

Hence why our VAT is 21% where as in canada they pay a lot less.

Anonymous said...

I don't care how much of the product price is tax. I don't want to know their overheads or how much they spend on marketing either. I just want to know how much the stuff is going to cost me.