I don't know why we can't just force everyone to show post tax/fees price upfront. It's complete bullshit that every restaurant bill comes with 3 different taxes.
Yes, it's on top of VAT. It's usually "discretionary", meaning you can ask to have it taken off the bill, but you must ask and it usually results in being glared at.
I'm in Ireland, I'd say a good third of printed on labels are not even in the right currency, as companies have a single UK and Ireland SKU. It's also understood that generally it's the retailer that sets pricing, not the manfucturer, so when a book has $9.99/£8.99 printed on it and a store sticker with €12.99, nobody is confused that that's not the exchange rates, or about which price they'll pay.
I'm also in CA and lived on Arizona for most of my teens and early 20s. Never saw this pricing. I would have remembered it, especially during the skint college years. It's always been a dollar. At best you'd see 2 for 1 deals.
It sounds like you live in a heavily subsidized market - probably best not to try to draw generalizations about inflation from your specific circumstances, they are atypical.
Taxes are set at a multiple levels (federal, state, district, and city) so it's pretty much impossible to show the post tax price on the label. Hidden fees are a completely different issue.
That argument about multiple level taxes is always beyond me. Taxes are not stock market which changes in unknown direction constantly, they are always known at the worst weeks before implementation.
In my eastern European country even biggest supermarkets can change all labels overnight (I even bet they can can do at least twice daily - albeit with here and there confusions when there multiple labels for same good)
And western European one have e-ink price tags. And one time there was wrong item on a tag. So I asked the person filling the shelf for help. He read the tag and item and behold in 5 minutes it updated itself to correct item and price...
It is not like these shops hop hourly between taxes...
It's not really a problem in brick and mortar stores. It's a problem in online stores because you can't necessarily give someone the right price with taxes until you have their address.
And this problem is harder than some might think. I knew someone who lived on a street that was a "dividing line" for this stuff: same zip code, same city, but one side had a 9% sales tax, the other side had around 7%. We tested a lot of online stores and none of them got it right. Including Amazon.
> How do they know how much tax to charge you when you buy?
Did you miss the part about it being calculated in the cart? That’s after you’ve made the decision to purchase, a decision which presumably included the price. I would refuse to give every vendor my address just to see a price.
>I would absolutely refuse to give every vendor my address just to see a price.
How does it work now? If you don't give your address, but the price depends on your address, how does the store know how much to charge you? If you don't have to give your ID then surely you just say you're from the lowest tax location?
Most online stores immediately ask for your location (or know a good estimate via IP or ad tracking) anyways. Or ask you to "search for the nearest location." So there is already a lot of data they could use.
I've never seen an online store ask for my address before I'm in the checkout process. The only exception is when I check to see if an item is in-stock at my local store or if one-day shipping is available.
The location detectors are notoriously bad. I'm either placed in some town in Washington (multiple states from me) or somewhere else that does have different local tax than my part of my state.
It's also just not as concerning from a competition or perspective, since taxes apply to all competitors, and none of them have the freedom to set those rates.
Yeah, so in the US that doesn't work. Most obviously for display, tv, or radio ads you cannot ensure correct taxes in the advertisement (this was a big eye opener when I first moved to the US).
It also doesn't work for online sales, where the final price can depend on the final destination of the goods or service. e.g. the taxes cannot be displayed until you've been given a street level address.
For me for example even my zip code spans 3 different cities with different tax codes, my street is literally one block from a different city in one direction, and about 5 blocks to another. \o/
>Most obviously for display, tv, or radio ads you cannot ensure correct taxes in the advertisement.
They really shouldn't be advertising false claims in the first place.
>It also doesn't work for online sales, where the final price can depend on the final destination of the goods or service. e.g. the taxes cannot be displayed until you've been given a street level address.
That one has an easy solution: Just ask for the destination.
> They really shouldn't be advertising false claims in the first place.
Just to be clear, you're suggesting that all pricing be removed from all advertising nationwide. This would clearly be to the detriment of the consumer.
> That one has an easy solution: Just ask for the destination.
Again, this is to the customer's detriment. They have to provide their personal information just to see the price of any item on any website they visit? And that's somehow worse than having to mentally add a percentage to any price they see until checkout? You must be kidding.
> They really shouldn't be advertising false claims in the first place.
They aren't false advertising, they say "$X + tax and fees", this law is about removing the "and fees" bs where the seller is actually charging more than the advertised price but pretending it's a nebulous fee they didn't set.
I also think you may not be understand the degree of BS. My partner and I were recently buying a new car, and not one car dealership was advertising a true price for their cars. Multiple dealers had something that they literally stated was a "market price adjustment fee", that was not given until you were in the process of purchasing the car. These "fees" were 5-10 thousand dollars on a 30k car.
> That one has an easy solution: just ask for the destination.
So you would be ok if the first step in shopping online is giving the site your street address? you're saying that you could not price compare online without first providing your address to every company you were looking at.
I'm assuming you aren't in the US, so you aren't familiar with how its governance works. Every state, county, and incorporated city can have its own sales and service taxes. It doesn't matter if you think that's a questionable setup - the US constitution guarantees that right at at least the state level, and most states have similar laws guaranteeing some amount of that power to county and city governments, so it is literally impossible to remove this structure. So this issue is how do you make this law work, given the constraints of how the US government is constructed. "Solutions" that require any kind of unification of governance are almost certainly unconstitutional (again this separation of governance is a part of the US bill of rights).
AFAIK (I'm American), the UK has a VAT rate for any good a consumer might find in a shop: 20%, 5%, and 0%, depending on product type. Because this rate is country-wide, the manufacturer can include VAT in their RRP. For example, if I go to the Sony website, a PS5 is £479.99 incl. VAT. If I go to the Amazon UK site, it's £466, or 3% off, incl. VAT.
If we locate the same product on the Amazon US site, it's $499.99 before tax. Amazon has two choices: show their price before tax or require shipping information from the user to see a price at all. (An estimated geolocation is not precise enough to determine a price.) For most consumers, I suspect seeing a pre-tax price upfront is better than having to provide personal information to see a price at all.
That explains online sales, but let's address brick and mortar retail. Imagine you go to Best Buy to comparison shop against Amazon and the price says $550 including tax. Is tax on this item in this location 10%? Or is it 5% but Best Buy's base price is higher than MSRP? It's up to me to find out the local tax rate and do the math. Let's say they agree to price-match Amazon; the clerk will need a function on the register to input a pre-tax price to facilitate this.
So, given this complexity and disparity, US manufacturers list MSRP without tax. Retailers display pre-tax prices for marketing and competitive reasons, generally never exceeding MSRP. Customers have come to expect this nationwide, so changing now would be challenging. (There are other good reasons to stick with pre-tax, too. In grocery stores, for example, pre-tax prices are very useful for SNAP beneficiaries.)
Do I think it would be useful to display tax calculations on signage in-store? Absolutely, and for some goods in some states, they do. But without laws or customer demand, retailers have no incentive to put themselves at a competitive disadvantage.
1. Taxes can change quickly, and it's a pain in the ass to keep up with. If you're now needing to deal with changing the printed price on tens, hundreds, thousands of items - I can't even imagine.
2. Online sales you won't even be able to calculate it until the customer puts in their shipping information. And no, they can't figure that out beforehand as there are a myriad of reasons why where their IP is does not mean where it's being shipped to, which is where the taxes need to be calculated.
I'm curious, do books have prices printed on them in the UK? Here in the US, the suggested retail price (pre-tax, obviously) is generally printed by the manufacturer on the back or inside the dust cover of every book.
Almost every other country in the world has solved this problem.
It’s always fascinating when Americans have problems other countries don’t have, and just throw their hands in air saying “welp nothing we can do about it”
One group always pushes the "nothing can be done" narrative because they've been making money hand over fist because of the way things are now and they don't want the status quo to change. Another group who jumps straight to "nothing can be done" have been conned by the first group into thinking that any deviation from the status quo is a trick by the devil to somehow take their freedom/property. Add in an unhealthy dose of American Exceptionalism and irrational fears of other countries and it means that there will always be somebody unwilling to consider adopting a good example set by people with a different flag or a funny accent. The rest of us are more frustrated than fascinated by the whole thing.
That's because other countries aren't as aggressive about pushing governance down to a local level.
For example: in most countries you include sales tax in your advertisement, because why wouldn't you? In the US there is no countrywide sales tax, there are some states with literally no sales tax, and then there are states with high sales tax to compensate for zero income tax (which is excitingly regressive taxation).
Then inside the states each county can have its own array of sales and service taxes, which can also vary according to the goods and services involved, and finally individual cities in those counties can also have their own.
Core to this is that the US constitution explicitly enshrines federalism in the tenth amendment (the last part of the "bill of rights"), that explicitly limits the power of the federal government.
> Core to this is that the US constitution explicitly enshrines federalism in the tenth amendment (the last part of the "bill of rights"), that explicitly limits the power of the federal government.
I think this is the part that non-Americans fail to understand; we have no central tax authority and that principle is enshrined in our Constitution. Like it or not, so long as the US exists in its current form, so too does our wildly disparate tax code.
The price on labels in a store is an absolutely negligible part of the problem. By the time you're looking at prices in the store you've already chosen that store, presumably on the basis of the advertisements.
So the problem is that your rule impacts the prices everywhere that you see a price: any price you see online, in a poster, in a magazine, in a newspaper, in a mailer, on tv, or hear over the radio cannot include the correct taxes for where you pay for or receive the product/service.
The only place that can have the correct price is an in brick and mortar shop at the final point of sale, and even then some prices can be impacted by things like whether you're a retiree, disabled, veteran, etc. The lack of tax in the price is annoying but is predictable and is consistent. Failing to include the relevant taxes does not impact the relative cost of anything on the shelf. If you choose product A because it's the cheapest, it will still be cheapest once tax is applied. The problem addressed by this bill is when product A is the cheapest on the shelf, but has a secret fee that no other product has, that you don't find out about until checkout.
Legislation that said "you must include the final paid price in any price" in the US literally means "you cannot advertise a price for the product".
To be clear, if you go to an online store, then your rule means none of the listings can include any price information until you provide the final delivery address. Good luck comparing prices.
Hence the law says "your advertised/stated/sticker price must be the full price including any 'fees' and similar that are not set by a government agency".
That is it fixes the only thing that it is possible to fix: prices online including "fees" that are really just part of the price. In addition to being odious and anti-competitive I would also argue that those "fees" are attempted tax evasion to create a fake price for sales, and similar taxes.
Would I like the listed price to be the actual real price being charged? of course, the only people who disagree are also the ones abusing the "fee" BS that this law bans. But any law that attempted to do that by mandating inclusion of taxes in prices would instantly mean that advertisements in the US (I guess technically just CA in this case) would be unable to include any price information.
So is it annoying that when I see prices in advertisements I have to remember to add some % to the price? of course. Is being unable to fix that a reason we should also have to allow retailers to add completely arbitrary and fake "fees" that are a mandatory part of the price that the retailer (or whatever) has complete control over?
I would say the argument is no, we should not allow that, and that's what this law bans.
It sounds like you're saying that because we can't fix the pricing to include taxes everywhere, we shouldn't stop companies from having fake fees?
> Hence the law says "your advertised/stated/sticker price must be the full price less taxes".
And that is bullshit. In India every manufacturer is mandated to specify MSRPs that are inclusive of all applicable taxes everywhere. The US can have the same thing too, and remove all complexity altogether so that each item will have a uniform benchmark price against which different stores and retailers can show discounts on.
And by the way, India's taxation is much, much more arbitrary and toxic than US taxation, and has a similar kind of structure with various local taxes piling up on federal taxes. Companies still make it work.
What do you mean "impossible" If waiter or cashier calculates final price when you pay, it must be possible to calculate it upfront. Im not aware of situations where final price would depend on the purchaser. That would be discrimination.
The good thing is that prices (in stores) are set in the store. The labels are most likely little e-ink displays. There's absolutely no reason to not show the final price there aside from wanting the advertised price to be lower than it actually is.
The same chocolate might have a different price depending on the store I go to as well and that doesn't seem to be a problem at all.
That only makes sense for an online store that's going to ship you something, in which case asking for the destination ZIP code up front solves that problem.
For brick-and-mortar stores, the store can quite easily calculate the final price of an item on its own. Sales taxes do change on occasion, but likely less often than the pricing of the items themselves do, so there's no added burden in having to update them due to tax changes.
> That only makes sense for an online store that's going to ship you something, in which case asking for the destination ZIP code up front solves that problem
Tax boundaries do not follow zip code boundaries.
To actually find the right tax rate you need the full address, including suite or apartment number because there are cases where a tax boundary runs between different suites at the same street address.
Also this is not just for online stores that ship something. It also applies if you are selling a downloadable good like a game or music, or selling memberships to your site.
FYI, ZIP code is not enough to calculate tax rate. You need city and county. 9,000 ZIP codes cross county borders.
Currently, consumers can generally tell if they are getting a reasonable price by comparing the MSRP they see in an ad against the price they see in store. For example, if the nationally advertised price of an Xbox is $500 and Best Buy has it for $500, I know I'm not being swindled.
But if the in-store price is $550? I guess I have to haul out my calculator and ask for the store's tax rate so I can determine whether or not Best Buy is ripping me off and I should take my business elsewhere.
Ideally, they'd show pre-tax price, tax rate, and calculated total price on every tag. Maybe, one day, we'll see action on this in a state or two, but I don't suspect it is high on the lists of any lawmakers.
And yet the register magically knows how much tax to add for each and every item you buy. I could maybe agree with your argument if taxes changed often, but they don't, and it's very much possible to calculate them beforehand and display full price.
I disagree. Note the California bill specifically exempts taxes from this "upfront pricing" requirement.
The reason I think listing taxes separately is OK is because (a) it is not something that the business itself has any choice over, and (b) all businesses have to tax the same for equivalent services. I think listing the taxes separately serves an important purpose to remind the purchaser about where your payments are actually going. If you don't like the fact that you have to pay 3 different taxes, well, if enough other people agree with you, you can change that.
I'd be OK with listing taxes up front (but I will say that restaurants I've been to always highlight any mandatory fees besides normal sales tax on the menu) but I'm absolutely in favor of breaking out the cost of government services on the bill.
but I will say that restaurants I've been to always highlight any mandatory fees besides normal sales tax on the menu
In San Francisco, restaurants rarely highlight the fees. They are usually in smaller font at the bottom of the menu (and maybe only on one side of a double-sided menu) and sometimes not discoverable until you get the bill.
Tartine hides the 5% surcharge at the bottom of the menu in smaller font. It's also one of three bullets: the first and third are about food safety.
What's the rationale for putting the surcharge bullet in between the two food safety bullets?
Also: if you order online from Tartine, you won't see the surcharge until you go to check out. And if you order from one of the handwritten 'daily specials' signs, you won't see the surcharge until you pay.
Perhaps "highlight" was the wrong word choice, but it is specifically called out on that menu example. I didn't read the full bill but I'm assuming since the required charge is fully visible, this restaurant would be fine (of course, as long as that required charge was also shown in any advertising that included prices).
FWIW, I think those kinds of "5% employee surcharge" fees are total bullshit and should be included in the price. The only reason "fees" should ever be pulled out separately are if they're optional, variable, or depend on something besides the unit cost on the product.
I didn't read the full bill but I'm assuming since the required charge is fully visible, this restaurant would be fine
That's not my understanding. Charging a random fee that's not disclosed to the customer before they order is already illegal. The new law goes further: any random fees should be rolled into the advertised prices.
> The reason I think listing taxes separately is OK is because (a) it is not something that the business itself has any choice over and (b) all businesses have to tax the same for equivalent services.
(a) is really just like the price of basically all of utilities, and all the indirect taxes paid on salaries... the only difference is that they are not directly calculated on turnover. Should we also break that out?
(b) is actually an argument in favour of integrating the taxes in the prices : there's no difference between businesses, thus no need to bother the consumers with it -- in the end, they will pay something that includes the taxes, wherever they go.
> I'd be OK with listing taxes up front (but I will say that restaurants I've been to always highlight any mandatory fees besides normal sales tax on the menu) but I'm absolutely in favor of breaking out the cost of government services on the bill.
You mean like basically everywhere in the world where your receipt does show "of which VAT rate A% : X, rate B% : Y, Special Tax: Z" ?
Sales taxes are good because tourists pay them. Most people mad about taxes hate property taxes, because they want to move all the tax burden to tourists (and their own children.)