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Does the average american, when naming a price of any given item, takes into account taxes or disregards it?

Watching a documentary, there was aremark from the journalist on how, due to how wildly taxation on goods may vary, from area to area, in the US, most retailers do not put the full prices on the shelves and instead just tally it at checkout.

This made no sense to me, a european, as when I go to any regular shop, prices already include all taxes applicable to the product.

There are specialty stores where VAT and other taxes may not be applied on the price on the shelf but those are usually wholesellers, selling for professionals, that already know what additional taxes will be added and at which rates, at checkout.

Not having the full price you'll be paying, on display, seems very underhanded and a bad practice. The client should know how much they are going to pay from the moment they pick an item.

92 comments
  • Whether or not I factor in tax is entirely dependent on the size of the purchase I'm making. For the vast majority of purchases I make on a daily basis, I don't think about it at all. 7% of $2.99 is negligible to me. However, if I'm making a large purchase, or if it's a purchase which I know is subject to additional taxes beyond the sales tax, then I might consider it. 7% of $2.99 may be negligible, but 7% of $29,999 is a significant amount all by its lonesome.

    For most people, I'd imagine this is most common when it comes to purchasing vehicles, as those tend to carry large prices and special taxes which results in a significant increase in price. For example, I purchased a new vehicle a couple years ago for MSRP, but wound up paying several thousand dollars more than that due to various taxes and the registration fees. I didn't know exactly how much those surcharges would be (though I easily could have calculated them by visiting my state's Department of Motor Vehicles website and plugging a figure or two into their calculator) but I had a ball park idea which I could budget around. Also, I'm pretty sure the dealership I bought from provided an estimated total purchase price which included the fees for the locality it was located in. Unfortunately, most of that was irrelevant to me, as I had traveled from another state to purchase this vehicle, which illustrates the minor frustrations that an all-inclusive price tag would introduce in America.

    Like, I don't think you're wrong for thinking it's odd, and yes, there are ways to fix it, but it's just such a non-issue (not to mention America's "touchy" relationship with taxation meaning these attempts to "fix" things would rapidly become politicized) that no one cares to do anything about it. As someone else said, we intuitively learn what the rough tax rate will be for our common purchases and just factor that in.

  • people usually just say the pre tax price and everyone already knows the sales tax. Sometimes people say the total, but that’s usually for smaller items. For example:

    A sandwich from a deli costs like $11 total and that’s what they’d say.

    A video game costs 59.99 and people would say it’s $60, but everyone knows it’ll really be like $66.

  • We did a trip to the US that covered coast to coast by plane and then 5000k of driving back to the centre... And their pretend pricing sucked.

    Every state we went to advertised a price, but what you actually paid varied by heaps.

    Bought some clothes that were something like $700USD by the tag, and had $1000USD on hand... Which wasn't enough once they rang it up! Wtf?

  • We just think about the base price, but the taxes. Then at checkout you're told "oh, that number you had in your head? Add 5-20% more as a surprise"

    It's a terrible system, very anti consumer. You never get used to it

    Oh, and it also has the fun side effect of making sure nothing ends on a dollar amount

  • Yeah, it's shitty, but we also know it's gonna happen. It's not like it's a surprise. Sometimes you might get a little extra sticker shock but it's not as underhanded as it seems unless you're very new to the process. The same way we tip, I just assume I'm gonna pay ~30% more than the price due to tax and tip.

    I've also never had to budget so much that the specifics of the tax mattered to me, like I've never had to stretch money like that, so that could be part of it.

  • As far as I can tell, once the question about price is asked, they will make a remark about how awful the Republicans or Democrats are (depending on their leanings).

  • Sales taxes vary based on city, county, and state rates. They can also be waived if you, the buyer, have a reseller permit or are purchasing for a non profit.

    It's not underhanded and is annoying for sellers too because they have to know a lot about sales taxes as well. They could show you the price with local taxes included but then most customers would think their prices are too high comparing to other merchants.

    So the price shown on the product in a store or online is only what the merchant is selling it for. The price at the register is what the merchant is selling it for plus the taxes they have to collect (unless you're excluded for the reasons mentioned above).

    The tax is a buyer obligation, not a seller obligation but sellers have to be an intermediary. So buyers should be educated about the tax laws that apply to them (in this system).

    The receipt should be clearly marked so you know exactly how much went to the product and how much went to tax. You can itemize and deduct your sales taxes from your federal income taxes if you're so inclined to track it (and it's a better result than the standard deduction)

    It's more complex than a VAT system but enables local jurisdictions to levy taxes to pay for various things applicable to their area.

    🤷‍♂️

92 comments