Thursday, 18 November 2010

Sales tax (and VAT)

In america the price you see for things isn't necessarily the price you'll pay at the checkout. They almost always add sales tax at the checkout.

Plus, the sales tax varies depending on where you're buying from. There's probably a state component (most of it), plus a local component.

In california, sales tax is *about* 10%. I think it actually varies from, like, 9% to 9.75%, but I just figure it's about 10%.

It makes sense to advertise prices ex tax for several reasons:
1. A multi-outlet chain couldn't advertise prices if the prices would be different in all their stores
2. Taxpayers think it important that the sales TAX be as prominent as possible, to avoid people taking it for granted. After all, it's *them* taking *your* money.

This contrasts with the UK, where VAT (which is *like* sales tax, but not the same) is always included in the price for sales mostly to consumers. (Stuff that's mostly sold to businesses can be advertised with the exclusive-of-vat price.) The VAT rate is the same throughout the country, so the "don't know what the price will be" argument doesn't make sense.

I'm torn: on the one hand, I like the convenience of the UK. On the other, I like the fact that Americans constantly bristle about tax. If you ask me, they don't bristle enough, but any bristling is good bristling.

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