On 22-Jan-12 18:39, Miles Bader wrote:
Stephen Sprunk writes:
Here in many (if not all) parts of Europe, the price that you pay for
something already has relevant taxes figured in.

That way seems more logical. It's certainly more efficient.

... and in my experience it makes for a lot more peace-of-mind when
shopping. Even though one _can_ just mentally add on the tax rate
when looking at an item,

Good luck with that, unless the item's price and tax rate together only
have two or three significant digits. That's rare in my experience; for
instance, I might see something priced at $39.95 with a tax rate of
8.25%, for a total of seven significant digits. While some people may
be able to figure out the after-tax price in their heads, few would
bother with the effort, and most can't do it at all.

there's something really comforting about knowing that the price
shown on the tag is actually the exact amount of money you'll have to
fork over.

Indeed. On my first trip overseas, that was one of the most welcome
aspects of shopping: you know exactly what you're going to pay. This
also encourages round-number pricing ($40 vs $39.95)--something that is
pointless under a pre-tax pricing model.

This is especially true for high-priced items (where the difference
isn't trivial), but it's also is really nice for _low_ priced items,
where you can actually look at the amount of money you have in your
hand, and be completely sure you'll have enough...

Yep, and I vaguely remember learning that lesson as a kid: a dollar
can't buy things in a store priced $0.99. That's just plain stupid.

[I suppose one reason U.S. retail businesses would vehemently object
to a VAT or "more honest labelling" regulations, is that the
"perceived price" of their goods would go up, even if the amount paid
by customers stayed the same...]

That's really only applies to one merchant doing it voluntarily; if they
were all forced to do it, all posted prices would rise slightly and
everyone would adjust with minimal complaint since the actual prices
paid wouldn't change.

A bigger problem is the variation in tax rates. When a merchant
advertises a price of $10 today, they get $10 everywhere; if the tax
were included, the net amount would vary between locations. With sales
tax rates ranging from 0% to 12%, and many merchants' margins often
being less than that, that would cause serious problems.

S

--
Stephen Sprunk "God does not play dice." --Albert Einstein
CCIE #3723 "God is an inveterate gambler, and He throws the
K5SSS dice at every possible opportunity." --Stephen Hawking