>And this is why we don't just add it to the price? This is the grand reason?
I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate.
>Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay?
For whom? I don't see how it would be better for me but as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?
> I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate.
Nope. VAT has complicated rounding rules too. Turns out it actually is still easy to roll it into the price.
> as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?
It's a lemon market. It's better for the customer if the actual price is displayed up front, but the customer has no way of knowing which shops are advertising real prices and which aren't.
You mean it's a market with information asymmetry? How so? Customers know both that the sales taxes exist and their magnitude. If you think it's a great idea you can put big sign saying on your shop/in your ad "inc. tax" instead of "plus tax", which is on most advertisements already. Surely customers could read it.
Why are sticker prices $24.99 instead of $25.00? Tricks the brain into thinking the price is lower. Same thing with additional tax at counter instead of sicker price.
> Customers know both that the sales taxes exist and their magnitude.
Customers have a sense that they exist and a vague idea of their magnitude, perhaps. They don't calculate them, at best they compare the advertised number - remember most customers are average intelligence or below.
Everyone has a phone that can manage calculations nowadays, few people can or want to calculate precise taxes. I still don't see how it makes advertising prices with taxes a "lemon market", which somehow prevents businesses from advertising such prices, if I understood your assertion correctly. Some businesses do advertise prices with tax, most don't. If people really wanted prices to include tax they'd naturally took their custom to the businesses that advertise "inc. tax" and took it away from "plus tax" ones, resulting in the situation opposite to what we have now.
I don't think so, there are more apparent reasons listed in this thread already. I am just pointing that rolling a sales tax into price is not as simple as some imagine. I imagine VAT is accounted differently so it could be rolled into the price without this kind of error but I've never dealt with VAT so I can only speculate.
>Wouldn't it be far better to establish a rock solid precedent that the price there is the price you pay?
For whom? I don't see how it would be better for me but as somebody else noticed, the retailers are free to roll the tax into the price, the fact that they don't do this might be a pretty solid indication that it's not better?