My American Brethren! Can you explain this to me?

[Slaanax]

So the government can get money? It's pretty simple to me. And it's not in all states, some don't have it, I think Pennsylvania doesn't have it, but that might be food tax.

There is sales tax, but it isn't included on certain items. If you buy games and stuff their is a sale tax.

 

[Albino Boo]

7% VAT? Ehh, you are lucky, guys. In poland, VAT is always included in price, but we have 23%

It's not a Value-Added Tax, it's a tax on the total sale price of the item. For example, a $10 item would be $10 + $10 * .0855. A VAT is a tax on the seller's profit, not the total sale price.

In the EU VAT is paid on the sale price and not the profit and thats how governments of 350 million people define it. I suggest that you write and tell them they are all wrong.

 

[Rubashov]

EDIT: To clarify, what I'm basically asking is why can't American shops include VAT (or thier equivalent) in their prices?

because the total sale is what is taxed a certain percentage, not each item. does that make sense?

No. (sorry to be a dick, but I'm a math major, so I must!)

ax + ay + az = a(x + y + z)

or

(7% * 9.95) + (7% * 29.99) = 7% * 34.94

Sales tax is the same regardless of when and how you apply it.

Uh...somehow, I doubt that's the case.

(7% * 9.95) = 0.6965, which rounds up to 0.70.

(7% * 29.99) = 2.0993, which rounds up to 2.10.

So effectively, (7% * 9.95) + (7% * 29.99) = 2.80.

Whereas (7% * 34.94) = 2.4458, which rounds up to 2.45.

And 2.80 > 2.45. It should be obvious how much this effect can add up, with the result that (assuming the VAT works this way; I'm no expert on how it's calculated) the VAT ultimately makes the consumer pay considerably more because of roundoff error.

ax + ay + az = a(x + y + z) only works in theory.

EDIT: Of course, since the number you actually meant to use as the sum of 29.99 and 9.95 was 39.94, not 34.94, what really matters is (7% * 39.94), which is 2.7958, which rounds up to 2.80. So in your example, you're correct; the VAT and sales tax ultimately demand the same expenditure from the consumer. However, as the price and number of items purchased increase, so does the potential for roundoff error, so real differences can and will appear in larger purchases.

 

[Lonan]

7%? It's 13% over here(Canada), and it's a *****. Not including the tax means that everything seems cheaper, especially on larger purchases. Something $299.99 looks like it's $300, it's 338.99. So 38 dollars go to the government, and a consumer is angry about sales tax.

Alberta=5%

Like Canada its just a Tax for general services (Eg. Fixing roads, etc) Of course its only 5% in British Columbia, but now we have a new 14% tax on food and other things which people are complaining about.

It only upsets me now because instead of getting my subway for $12, it now costs me $15, which makes me just short for a video game rental. RAGE.

Alberta=5% on everything except food. (No tax on food)

Lucky Americans. They charge us 13% here in Canada.

Its always so scary at the cashier. I can just feel my money washing away every time I swipe my card.

Alberta=5%

Taxes. There's a little bit added to the cost of everything. Yeah, it'd probably make more sense if they just included tax into the full price you see, but then that'd require a little more math.

And as we all know, people in business can't do math.

They do the same thing here in Canada with the GST and the PST. A few stores and restaurants include them in the pricing but most don't. You just have to get used to figuring it out in your head, that is all.

Still, it is irritating.

Again, Alberta has no PST!

To anyone who buys gasoline, flies in a plane, uses anything that had to be transported, buys plastic, or buys anything that requires oil at all, thank you for your purchase! Please come again!

 

[guardian001]

EDIT: To clarify, what I'm basically asking is why can't American shops include VAT (or thier equivalent) in their prices?

Because people will be more willing to buy an item priced at $25.99 than one priced at $25.99 + tax.

 

[Glass Joe]

It just so happens that all us American's have so much money that price doesn't matter.

 

[Berethond]

7% VAT? Ehh, you are lucky, guys. In poland, VAT is always included in price, but we have 23%

It's not a Value-Added Tax, it's a tax on the total sale price of the item. For example, a $10 item would be $10 + $10 * .0855. A VAT is a tax on the seller's profit, not the total sale price.

In the EU VAT is paid on the sale price and not the profit and thats how governments of 350 million people define it. I suggest that you write and tell them they are all wrong.

Really? <url=http://www.economywatch.com/business-and-economy/vat.html>Because these folks don't really agree.

 

[Ironic Pirate]

You're asking why they don't include tax into the price, right? There seems to have been some confusion, so I'm just making sure...

Anyway, because stores want to make the prices look low, and there isn't a law making them add it.

My rule is pay them ten percent more than the price and take the change. Ten percent because I don't think it's ever more than that, and it's easy to figure out in your head.

 

[wastedyouth89]

Some things need price to be included afterwards. I'm in sales so when I add up the price for my sales, I have to include shipping fees first so I can tax those too. However I do think stores should just include it for our sake. I guess in matters like those they just want to keep everything on the same level. Also then it sounds awesome when some stores do "Tax free days".

 

[TheTaco007]

It's all because of taxes. They don't include taxes on the price tag because it makes them seem cheaper, and also because you're not actually being taxed on each individual item. If you bought 3 bags of groceries for example, you aren't being taxed on the lettuce, milk, and bread separately, you're being charged for 7% of your total.

 

[mezmerizer02]

it's a per state imposed sales tax. every state has their own individual percentage they charge for the product being sold in their state. it's flat, across the board, so in indiana it's 7% or 7cents on the dollar. not too hard to grasp really. when you go to california, where hollywood is, just look upcalifornia's state sales tax, and see if the district of hollywoof also imposes any countywide taxes as well. no big deal.

 

[Albino Boo]

7% VAT? Ehh, you are lucky, guys. In poland, VAT is always included in price, but we have 23%

It's not a Value-Added Tax, it's a tax on the total sale price of the item. For example, a $10 item would be $10 + $10 * .0855. A VAT is a tax on the seller's profit, not the total sale price.

In the EU VAT is paid on the sale price and not the profit and thats how governments of 350 million people define it. I suggest that you write and tell them they are all wrong.

Really? <url=http://www.economywatch.com/business-and-economy/vat.html>Because these folks don't really agree.

VAT is harmonized tax with the same definition across the whole EU with the member states able to set rates with ranges. VAT was harmonized in 2006 so what the French did in 1954 is irrelevant

 

[Eldritch Warlord]

EDIT: To clarify, what I'm basically asking is why can't American shops include VAT (or thier equivalent) in their prices?

They can. They don't because different States have different sales tax rates (because the sales tax is levied by State governments). Retailers that operate in multiple States set a base cost for their items for operational simplicity. Nation-wide advertising also saves money by not distributing slightly modified ads to areas with different sales tax rates.

People are simply accustomed to shopping for things at the "tax-free" price then adding the tax at check-out so even smaller shops label their items with non-tax adjusted prices.

 

[JaredXE]

The State decides to do that so tourists can help support their budget. That said there are several states that have either no sales tax or very limited sales tax.

Oregon
New Hampshire
New Mexico
Delaware
Alaska

I believe these are the states you can visit without having to worry about 7% being added to the price of the useless crap you buy at the gift shop.

Don't forget Montana, no sales tax for anything there either.

 

[MrFluffy-X]

yeah that is retarded

 

[Aulleas123]

Ah, so it must be that they don't have meal tax. I remember going up to Pittsburgh and not having to pay tax on a hoagie.

No, we do have a tax on foods (sodas in particular) however the food carts are not under those taxes. So when you come and visit Philly and grab a cheese steak, do so with the relief that you don't have to pay Uncle Sam anything directly (indirectly probably, but not directly).

Did you end up grabbing a hoagie from a cart or a restaurant?

 

[Shock and Awe]

I believe those are taxes that go to state government. Some states don't have it, some have bigger ones without other taxes.

 

[nunqual]

Ah, so it must be that they don't have meal tax. I remember going up to Pittsburgh and not having to pay tax on a hoagie.

No, we do have a tax on foods (sodas in particular) however the food carts are not under those taxes. So when you come and visit Philly and grab a cheese steak, do so with the relief that you don't have to pay Uncle Sam anything directly (indirectly probably, but not directly).

Did you end up grabbing a hoagie from a cart or a restaurant?

From a restaurant. Maybe my memory serves me incorrectly, all I know is that it was cheap and good haha.

 

[SilentHunter7]

I think Pennsylvania doesn't have it

I wish. They fucking tax everything here. If Ed Rendell could find a way to tax the air you breathe, trust me, he would. The sad thing is, just this year he managed to bring in half a billion in new revenue from legalizing casinos, and then taxing them, and he STILL manages to piss all of it away, and run a deficit budget.