Love this take, as usual with CGP Grey. Here in Canada we got rid of the penny what feels like a decade ago. I tend to pay with cash way less than I used to, but getting a nickel feels useless. I...
Love this take, as usual with CGP Grey. Here in Canada we got rid of the penny what feels like a decade ago.
I tend to pay with cash way less than I used to, but getting a nickel feels useless. I feel like if we just went right to quarters that would solve a lot.
When we got rid of the penny, people were so riled up about rounding up/down that was mandated, but quickly realized it wasn't worth even thinking about.
While a round up to the nearest quarter could be 'substantial' depending on taxes.. maybe we can just skip right to requiring taxes be included in price tags here and just have shops start pricing things accordingly.
I can literally not understand how this hasn’t been revolted against. What do you mean you don’t know how much you’ll be paying at the end? Oh the tax amounts differ by county??
maybe we can just skip right to requiring taxes be included in price tags here and just have shops start pricing things accordingly
I can literally not understand how this hasn’t been revolted against. What do you mean you don’t know how much you’ll be paying at the end? Oh the tax amounts differ by county??
It’s still a stupid excuse for not including the tax in the price tags. So what if you can’t put the exact price in an advertisement? It’s not like it’s the only way to advertise a grocery store....
It’s still a stupid excuse for not including the tax in the price tags. So what if you can’t put the exact price in an advertisement? It’s not like it’s the only way to advertise a grocery store. Heck, most of the advertisements I see for groceries already do not include prices!
It’s a way to deceive shoppers. Full stop. It should be illegal.
I agree, but I think it's impractical in the US. In Europe, VAT is set at the national level. It's easy for a company to advertise one price and have it be true for an entire country; due to...
I agree, but I think it's impractical in the US.
In Europe, VAT is set at the national level. It's easy for a company to advertise one price and have it be true for an entire country; due to linguistic differences, ads are country-specific.
In the US, you have two sales taxes: state and district. It's difficult for a company to advertise a price in a regional market.
New York City's sales tax is 8.875 percent; Jersey City's, just a bridge away, is 6.63%.
In the Chicago area: Chicago city's is 10.25%; its suburbs all have different rates.
In the Bay Area: SF, 8.625%; Oakland, 10.75%; Berkeley, 10.25%; Daly City, 9.88%; Marin, 8.25%; Palo Alto, 9.13%; and so on.
So if you were to advertise in an area where the districts all have different sales tax rates, you would have to show like thirty different prices, unless your stores are all located within one district or you have one store.
I've heard this excuse (vitriol directed at companies, not at you) for a while. Taco Bell charges more than the advertised prices by a couple of bucks on combos. As in, you look at the menu and...
I've heard this excuse (vitriol directed at companies, not at you) for a while.
Taco Bell charges more than the advertised prices by a couple of bucks on combos. As in, you look at the menu and see a $5.99 combo. When you go to order it and pick a local location, suddenly it's $7.99.
And they survive.
I think businesses will survive.
Just like the disclaimers for national advertising about prices being different in Alaska and Hawaii. Prices similarly could vary a bit and people would get used to it. They'd get the fuck over it. lol
I think that sounds like a problem for the corporations to have to deal with. Why should our life be harder and more confusing to make their advertising easier? I understand that's why it won't...
I think that sounds like a problem for the corporations to have to deal with. Why should our life be harder and more confusing to make their advertising easier?
I understand that's why it won't happen but I do think that it's a ridiculous reason when it comes down to it.
You're shopping for something online. What price does the retailer display? If prices must be accurate and sales tax-inclusive, and the site cannot determine your exact location because IP address...
You're shopping for something online. What price does the retailer display? If prices must be accurate and sales tax-inclusive, and the site cannot determine your exact location because IP address tracing is very imprecise (in addition to privacy concerns), then there are three outcomes:
You do not see the price at all until you share your geolocation or shipping address so the site can know which city you're in so it can calculate combined state and district sales taxes and display the price accordingly.
To see the price of this iPhone 16, please enter your address.
They show a price range based on highest and lowest sales taxes in your IP area. You then only see the exact price once you share your geolocation or shipping address.
iPhone 16, now $856.93–888.89. Please enter your address to see price.
They show the highest possible price, which itself wouldn't even be an accurate final price because the price you pay could be less so what's the point.
iPhone 16, now up to $888.89. Please enter your address to see price.
It would be the standard, so it would be very easy to get used to. Alternatively, they charge everyone 849.99 and make more or less money per area. It would also potentially discourage the large...
It would be the standard, so it would be very easy to get used to. Alternatively, they charge everyone 849.99 and make more or less money per area. It would also potentially discourage the large online marketplace in favor of the local store or small regional online business who can better estimate. Which IMO is a fringe benefit.
But see the local stores don't do that now, even though they could, because their prices can be undercut by the big boxes not doing that.
I already don't see a final price until the end, so I'm sure they can figure it out and my experience is already poor, so if we must do sales tax, which is annoyingly regressive, the reason not to do something like VAT isn't because it's hard on large national retailers' advertising and website design.
There are other reasons, perhaps, but I don't give a damn about how hard it is to advertise their phone/burger/taco as one of them. (And as noted by another commenter, I've been paying more than the national advertising price for combos and pizza specials for years due to IL having a higher minimum wage, so I'm underwhelmed by the concern.)
So, this way Has to go through extra UI to see final price Or they have to do the mental math of price ÷ highest possible sales tax % × their local sales tax % to get the final price which adds...
So, this way
Has to go through extra UI to see final price
Or they have to do the mental math of price ÷ highest possible sales tax % × their local sales tax % to get the final price
which adds one more math operation to the current way of doing it. And it's much easier for people to mentally multiply by 1.xx (the current way) than it is to divide by 1.xx or multiply by 0.xx.
I already have to do math or input my zip code to know the final price, I don't have to divide and multiply, just estimate the difference in percentages, which I'll know since that percentage will...
I already have to do math or input my zip code to know the final price, I don't have to divide and multiply, just estimate the difference in percentages, which I'll know since that percentage will be everywhere. We estimate this stuff all the time now.
Most people estimate their tax all the time. And apparently Europe already has you input a location for their iPhone-like purchases, so why would this be difficult?
But ok let's say big online purchases are the worst. People don't make as many of those as they make local ones. Let's look at picking up lunch in a drive thru even if you pre-order on an app. The prices are exactly what you pay, no surprises and looking for a penny, no extra buck or two tacked on there. What about a convenience store while traveling? You just need to grab shaving cream because you left it on the plane, wouldn't it be nice to know if you have the cash for it, in this new location with unknown tax? I may have memorized the cost of my breakfast sandwich with tax but it'd be nice to know if I've popped to the next city over is that the same price?
Even at big storefronts, Amazon knows my address, I have an account, so I could be getting accurate prices as I'm searching through.
I think you're overstating how much actual math is done by people in these situations vs the same estimating we do all the time, just with a higher base level of price transparency. Maybe everyone in VAT countries are miserable at all times over the math but I sincerely doubt it. It seemed to work fine when I visited (and I got VAT back) but it was a long time ago
It already works this way for websites in Europe. Many just show the base price with a huge callout that VAT isn’t included yet, and have to select your country. Yes, selecting a country is more...
It already works this way for websites in Europe. Many just show the base price with a huge callout that VAT isn’t included yet, and have to select your country. Yes, selecting a country is more simple than the US would be, but you can just have the user enter their zip code.
Someone would probably have to create a lookup for zipcodes and tax rates and require all government bodies who can set tax rates to publish them. But it's certainly a doable thing.
Someone would probably have to create a lookup for zipcodes and tax rates and require all government bodies who can set tax rates to publish them. But it's certainly a doable thing.
These companies already have to charge tax on all these different jurisdictions, so they already have these systems in place. They just have to redesign their websites to have a zip code field...
These companies already have to charge tax on all these different jurisdictions, so they already have these systems in place. They just have to redesign their websites to have a zip code field that changes the displayed prices.
For some additional info, I used to work at a winery. Our point of sale was commerce7. Before charging a sale, it seems a request to a company called Sovos shipcompliant. That service is primarily about managing alcohol shipment laws, but part of their offering is exactly this. You ping an address to their API, and they send back the current tax rates.
That's what I don't understand, companies already have to do this! It just makes it front facing. And if it drives business local then all the better IMO.
That's what I don't understand, companies already have to do this! It just makes it front facing.
And if it drives business local then all the better IMO.
I agree completely. The only argument against it that I ever found reasonable was that it takes a lot of labor to update the price labels of a brick and mortar retail store. But so many stores...
I agree completely. The only argument against it that I ever found reasonable was that it takes a lot of labor to update the price labels of a brick and mortar retail store. But so many stores these days use the e-ink price tags that they can update with a computer anyway. Not having to list prices is just 100% anti-consumer.
It was interesting moving to France. The listed prices are slightly cheaper, but not significantly cheaper. But the final bill always came or cheaper than I expected. It took me a bit to realize that tax was just included, so I didn’t have to add a mental 10% to the price of everything.
Actually tax collection can and often is much simpler than that. In California, for instance, we only needed to collect taxes for sales within the state. And for those who were billed in-state,...
Actually tax collection can and often is much simpler than that. In California, for instance, we only needed to collect taxes for sales within the state. And for those who were billed in-state, they only had to pay the sales tax local to the business itself, not based on where they lived. So everything effectively had two prices; a California price and an everywhere else price.
Like many of these solutions, corporations absolutely CAN and WILL deal with it. Small businesses will eat shit and once again get driven out of markets. These rules that ignore the convoluted...
I think that sounds like a problem for the corporations to have to deal with.
Like many of these solutions, corporations absolutely CAN and WILL deal with it. Small businesses will eat shit and once again get driven out of markets. These rules that ignore the convoluted reality of our laws almost always backfire into "well bestbuy has the staff and time to jump through all these hoops and get it right, but oops your local tech store doesn't and is now getting bought out"
Edit-
And to be clear I think the real solution to this is to not make it so hard to comply by standardizing the laws in a sane manner rather than putting the sole onus on the business owner to comply with all the nonsense.
I don't think this is an area where small businesses suffer, especially if most of their business is local. The same software (or an equivalent) that calculates the cost of taxes now can be used...
I don't think this is an area where small businesses suffer, especially if most of their business is local. The same software (or an equivalent) that calculates the cost of taxes now can be used on the front end. If they're doing online orders already they've probably got what they need. If they're doing those orders manually due to the peculiarities of their type of business, then they're going to do the same math for a VAT style tax manually.
In many ways this isn't that different from when I pay a flat rate at a farmers market in cash and the + tax amount on a card. They're still paying their taxes (or at least most of them are, idk I'm not their accountant) they're just baking it into their sale price, and using the increased card price to cover the processing fee.
Small businesses often do this already when allowed given receipt laws.
Again I'm not saying a sales tax is the ideal answer, just that inconvenience for large corporations advertising nationally or pricing their iPhones- which has been the focus, not small business - is not the reason not to do it.
As for in store (which feels like a pivot), prices legitimately are changing all the time. When I worked at a local dept store we were repricing things regularly. The local IGA prints off labels or hand writes them just as easily. Tax law doesn't change as often as grocery store pricing does for certain. And every gas station, from Freedom to Circle K, updates their tobacco prices regularly and clearly that I've seen at least, whether they're manually typing in prices or using a high tech POS, or whether they're committing EBT fraud. (And if they can manage EBT fraud they can manage pricing)
Up to a point? Again we're talking about proper price displays, so it can't just calculate "today's tax" on the backend based on item and location properties (sugary drink in new york county that...
Up to a point?
Again we're talking about proper price displays, so it can't just calculate "today's tax" on the backend based on item and location properties (sugary drink in new york county that cares vs doesn't).
Instead they must update all relevant pricing whenever the relevant laws change. This is not a trivial task, and an easy one to do wrong. Having your "tax guy" and "point of sale guy" work together to make sure everything is coded right is doable, having your entire floor team deal with updated pricing is a nightmare.
You see this right now with cigarettes, which can change pricing every month, or more, due to both manufacturer decisions (RJ and PM having a functional monopoly on the industry in the US) and the resellers are stuck having to jump through hoops and change signage in accordance or be punished for not complying.
Worse local government sometimes has to get involved and gets in its own way. Government employee A must place a sign following X rules, doesn't follow X rules, business gets a citation by the same government for the behavior of their previous employee. You then fight it and maybe clear it up, or maybe it doesn't really matter, but this is all time and effort wasted with the threat of your livelyhood on the line.
So again, the easier you make it to just follow the damn law in the first place, the more people will gladly do it. Little businesses and large corps don't love the "oh shit wait I forgot tax, hold on let me see if I can still buy this" surprise either, and if we simplified how we handled this stuff I think you'd see pretty heavy adoption. I'm certain there are counties or even states that could probably roll it out right now, and I would hope we can one day get there (inertia is a problem, especially when the average consumer will just say your prices are more expensive and go next door and pay the same amount in the end).
Again though, if you want this to happen in a way that doesn't screw smaller companies, it needs to be easier to comply.
I guess I just don't see why that is. "Stores update their prices when prices change" seems like the most basic aspect of a retail business. And how often do taxes change vs. how often stores have...
Having your "tax guy" and "point of sale guy" work together to make sure everything is coded right is doable, having your entire floor team deal with updated pricing is a nightmare.
I guess I just don't see why that is. "Stores update their prices when prices change" seems like the most basic aspect of a retail business. And how often do taxes change vs. how often stores have sales that require their floor staff to re-price their stock?
Literally every POS package I have ever evaluated has the ability to adjust prices with tax changes. And regardless, taxes don’t change that incredibly often. Maybe once or twice a year, if even...
Literally every POS package I have ever evaluated has the ability to adjust prices with tax changes. And regardless, taxes don’t change that incredibly often. Maybe once or twice a year, if even that. Though it depends on the politics of where you live of course
It even varies within a city, there's quite a few shopping centers around the metro where I live that are special redevelopment districts with an additional sales tax that's to pay off the...
It even varies within a city, there's quite a few shopping centers around the metro where I live that are special redevelopment districts with an additional sales tax that's to pay off the redevlopment bonds.
Plus, some places have asinine setups. Here in Colorado, sales taxes are remitted to each individual county and city, in addition to the percentage that goes directly to the state, instead of sending it all to the state and having them handle distribution down to the city and county level.
I don't see how there's anything wrong with that. Different municipalities have different economies, income levels, and thus standards for taxation. As to the pricing itself, it's just how it's...
Oh the tax amounts differ by county??
I don't see how there's anything wrong with that. Different municipalities have different economies, income levels, and thus standards for taxation.
As to the pricing itself, it's just how it's been. I don't think there's anything preventing the tax from being baked onto prices on local stores practically.
But it's honestly not a very big deal. You just mentally estimate how much the sales tax is going to be. Especially now that digital payments are all but omni-present, there's just not that much benefit from doing so. So the old way continues.
The thing that i think is missing is the option of just rebasing the currency. Make a dime worth what a dollar was, a penny worth what a dime was, and suddenly physical currency makes noticeably...
The thing that i think is missing is the option of just rebasing the currency. Make a dime worth what a dollar was, a penny worth what a dime was, and suddenly physical currency makes noticeably more sense. It's not a problem that we have coins, it's a problem that the value represented by the coins is too small. So change it. What could go wrong? It might feel weird to have a bunch of millionaires suddenly being mere hundred-thousandaires, but they can take the blow to their egos.
Is that something the government can "just do", though? They don't exactly decide the international (or even domestic) value of a dollar by the stroke of a pen. It's not as though they could go to...
Is that something the government can "just do", though? They don't exactly decide the international (or even domestic) value of a dollar by the stroke of a pen. It's not as though they could go to their creditors and say "Actually we're only going to pay you 10% of what we agreed because the US dollar is worth more now."
It’s not worth more. The denomination just changed. The denomination is arbitrary. When you do it, it has no effect on, well, anything: exchange rates or domestic prices....
"Actually we're only going to pay you 10% of what we agreed because the US dollar is worth more now."
It’s not worth more. The denomination just changed. The denomination is arbitrary. When you do it, it has no effect on, well, anything: exchange rates or domestic prices.
I suppose you would just create new dollars that are worth 10 old dollars, give a deadline for everyone to exchange old for new, after which the old dollars are no longer legal tender.
I suppose you would just create new dollars that are worth 10 old dollars, give a deadline for everyone to exchange old for new, after which the old dollars are no longer legal tender.
It's absolutely a thing that can be done, though generally it's done through retiring the old physical currency and minting a new one under a new name. And its not done without notice. There's...
It's absolutely a thing that can be done, though generally it's done through retiring the old physical currency and minting a new one under a new name. And its not done without notice. There's oldbux and newbux, and after a year the government only works in newbux and only accepts tax payments in newbux, and everyone moves over.
The UK did it to pennies from 1971. The pound was worth the same, but pennies went from 240 to the pound to 100. 1p coins from 1971 say "new penny" on them, but the name still didn't change while...
The UK did it to pennies from 1971. The pound was worth the same, but pennies went from 240 to the pound to 100. 1p coins from 1971 say "new penny" on them, but the name still didn't change while the value did.
It would be strange to try and mandate that money already in circulation be more valuable. Much more straightforward to introduce new coins in larger denominations, like they have in the European...
It would be strange to try and mandate that money already in circulation be more valuable. Much more straightforward to introduce new coins in larger denominations, like they have in the European Union. We tried this previously with dollar coins, which were unpopular for various reasons. I do think it is still an achievable goal.
In the long term, I would be happy if 50 years from now we phased out everything less than a dollar and had a currency system based on whole numbers, like the Yen is now. For now, quarters are definitely still useful.
That makes sense to me, mostly because it isn't clear what is supposed to happen if you get rid of coins completely. If I have a jar full of them, are they just trash? Or can I take them to the...
That makes sense to me, mostly because it isn't clear what is supposed to happen if you get rid of coins completely. If I have a jar full of them, are they just trash? Or can I take them to the bank and get money for them, and maybe the bank gets credit from the treasury?
If we rebased the currency, there would likely be a period of time - say a year - to "turn in" the old money for new. If we discontinued coins, there's no real reason to limit how long those could...
If we rebased the currency, there would likely be a period of time - say a year - to "turn in" the old money for new. If we discontinued coins, there's no real reason to limit how long those could be turned in. They have not lost any value, they just aren't being issued anymore. If you had a stash of hapennys from the 1800s, it would be smart of the government to allow you to turn those in for face value - although in that case, of course, you could sell them for more money than face value.
Hmm but if you just stop issuing a certain coin it will still be in circulation for years, and just be kind of annoying. Then I think a lot of places would refuse to take them. There are already...
Hmm but if you just stop issuing a certain coin it will still be in circulation for years, and just be kind of annoying. Then I think a lot of places would refuse to take them. There are already stores that won't take cash at all, and this is apparently legal.
I don't see that as a problem. Already if you have any decent quantity of these coins, you basically have to take them to a Coinstar and pay to have them taken (or some options for free, but...
I don't see that as a problem. Already if you have any decent quantity of these coins, you basically have to take them to a Coinstar and pay to have them taken (or some options for free, but still, it's not just cash, basically). Or a coöperative bank.
So stopping the production of these coins just means that businesses will have to start rounding to the lowest remaining denomination - like gas stations do with their 0.9¢ prices, rounding to the nearest penny. Stores will simply round to the nearest quarter for cash purchases, and perhaps keep pennies for card purchases (because no reason not to).
If you stop issuing these coins, they will fall out of circulation quickly.
Or businesses could choose to continue to accept them from customers, but give change out to the nearest quarter only.
No matter how it shapes up, these are very tiny problems at worst, in my humble opinion. The entire point is that these amounts are very small.
Then that incentivizes the person who has the cash in the old denomination to go to a financial institution that will exchange it for the new denomination. This isn't rocket science -- people in...
Then that incentivizes the person who has the cash in the old denomination to go to a financial institution that will exchange it for the new denomination. This isn't rocket science -- people in parts of Germany managed to do so more than once within the same decade.
I knew that pennies cost more to make than they are worth, I did not realize just how bad nickels were. $210 million to make nickels and $118 million to make pennies each year could be used to do...
I knew that pennies cost more to make than they are worth, I did not realize just how bad nickels were.
$210 million to make nickels and $118 million to make pennies each year could be used to do a lot more than making coins that are a net negative at this point.
This is the conclusion he reaches in this video - it's the only thing that makes sense with how rounding would work so you didn't land on values in between coins.
This is the conclusion he reaches in this video - it's the only thing that makes sense with how rounding would work so you didn't land on values in between coins.
Ditch all cent coinage, maybe have $1 and $2 coins and a $200 note. I might be a little more tolerant of cash if I could count on never having to deal with cents. Ideally never coins.
Ditch all cent coinage, maybe have $1 and $2 coins and a $200 note. I might be a little more tolerant of cash if I could count on never having to deal with cents. Ideally never coins.
I’ve been leaning towards this myself. I believe that all cash should actually be able to buy something, but you can’t even find those candy dispensers that will give you a gumball for 25¢...
I’ve been leaning towards this myself. I believe that all cash should actually be able to buy something, but you can’t even find those candy dispensers that will give you a gumball for 25¢ anymore.
Maybe bring back the half dollar. But make $1 and $5 coins instead of bills for sure.
Love this take, as usual with CGP Grey. Here in Canada we got rid of the penny what feels like a decade ago.
I tend to pay with cash way less than I used to, but getting a nickel feels useless. I feel like if we just went right to quarters that would solve a lot.
When we got rid of the penny, people were so riled up about rounding up/down that was mandated, but quickly realized it wasn't worth even thinking about.
While a round up to the nearest quarter could be 'substantial' depending on taxes.. maybe we can just skip right to requiring taxes be included in price tags here and just have shops start pricing things accordingly.
I can literally not understand how this hasn’t been revolted against. What do you mean you don’t know how much you’ll be paying at the end? Oh the tax amounts differ by county??
It often varies by city, not just county. One city can have a tax on sugary drinks that you could dodge by walking a couple blocks over, if you cared.
It’s still a stupid excuse for not including the tax in the price tags. So what if you can’t put the exact price in an advertisement? It’s not like it’s the only way to advertise a grocery store. Heck, most of the advertisements I see for groceries already do not include prices!
It’s a way to deceive shoppers. Full stop. It should be illegal.
I'm with you 100%. All prices shown should be tax-inclusive.
I agree, but I think it's impractical in the US.
In Europe, VAT is set at the national level. It's easy for a company to advertise one price and have it be true for an entire country; due to linguistic differences, ads are country-specific.
In the US, you have two sales taxes: state and district. It's difficult for a company to advertise a price in a regional market.
So if you were to advertise in an area where the districts all have different sales tax rates, you would have to show like thirty different prices, unless your stores are all located within one district or you have one store.
I've heard this excuse (vitriol directed at companies, not at you) for a while.
Taco Bell charges more than the advertised prices by a couple of bucks on combos. As in, you look at the menu and see a $5.99 combo. When you go to order it and pick a local location, suddenly it's $7.99.
And they survive.
I think businesses will survive.
Just like the disclaimers for national advertising about prices being different in Alaska and Hawaii. Prices similarly could vary a bit and people would get used to it. They'd get the fuck over it. lol
I think that sounds like a problem for the corporations to have to deal with. Why should our life be harder and more confusing to make their advertising easier?
I understand that's why it won't happen but I do think that it's a ridiculous reason when it comes down to it.
You're shopping for something online. What price does the retailer display? If prices must be accurate and sales tax-inclusive, and the site cannot determine your exact location because IP address tracing is very imprecise (in addition to privacy concerns), then there are three outcomes:
Any way it's not a great customer experience.
It would be the standard, so it would be very easy to get used to. Alternatively, they charge everyone 849.99 and make more or less money per area. It would also potentially discourage the large online marketplace in favor of the local store or small regional online business who can better estimate. Which IMO is a fringe benefit.
But see the local stores don't do that now, even though they could, because their prices can be undercut by the big boxes not doing that.
I already don't see a final price until the end, so I'm sure they can figure it out and my experience is already poor, so if we must do sales tax, which is annoyingly regressive, the reason not to do something like VAT isn't because it's hard on large national retailers' advertising and website design.
There are other reasons, perhaps, but I don't give a damn about how hard it is to advertise their phone/burger/taco as one of them. (And as noted by another commenter, I've been paying more than the national advertising price for combos and pizza specials for years due to IL having a higher minimum wage, so I'm underwhelmed by the concern.)
Edit to fix a word
So, this way
price÷highest possible sales tax %×their local sales tax %to get the final pricewhich adds one more math operation to the current way of doing it. And it's much easier for people to mentally multiply by 1.xx (the current way) than it is to divide by 1.xx or multiply by 0.xx.
I already have to do math or input my zip code to know the final price, I don't have to divide and multiply, just estimate the difference in percentages, which I'll know since that percentage will be everywhere. We estimate this stuff all the time now.
Most people estimate their tax all the time. And apparently Europe already has you input a location for their iPhone-like purchases, so why would this be difficult?
But ok let's say big online purchases are the worst. People don't make as many of those as they make local ones. Let's look at picking up lunch in a drive thru even if you pre-order on an app. The prices are exactly what you pay, no surprises and looking for a penny, no extra buck or two tacked on there. What about a convenience store while traveling? You just need to grab shaving cream because you left it on the plane, wouldn't it be nice to know if you have the cash for it, in this new location with unknown tax? I may have memorized the cost of my breakfast sandwich with tax but it'd be nice to know if I've popped to the next city over is that the same price?
Even at big storefronts, Amazon knows my address, I have an account, so I could be getting accurate prices as I'm searching through.
I think you're overstating how much actual math is done by people in these situations vs the same estimating we do all the time, just with a higher base level of price transparency. Maybe everyone in VAT countries are miserable at all times over the math but I sincerely doubt it. It seemed to work fine when I visited (and I got VAT back) but it was a long time ago
It already works this way for websites in Europe. Many just show the base price with a huge callout that VAT isn’t included yet, and have to select your country. Yes, selecting a country is more simple than the US would be, but you can just have the user enter their zip code.
Someone would probably have to create a lookup for zipcodes and tax rates and require all government bodies who can set tax rates to publish them. But it's certainly a doable thing.
These companies already have to charge tax on all these different jurisdictions, so they already have these systems in place. They just have to redesign their websites to have a zip code field that changes the displayed prices.
For some additional info, I used to work at a winery. Our point of sale was commerce7. Before charging a sale, it seems a request to a company called Sovos shipcompliant. That service is primarily about managing alcohol shipment laws, but part of their offering is exactly this. You ping an address to their API, and they send back the current tax rates.
That's what I don't understand, companies already have to do this! It just makes it front facing.
And if it drives business local then all the better IMO.
I agree completely. The only argument against it that I ever found reasonable was that it takes a lot of labor to update the price labels of a brick and mortar retail store. But so many stores these days use the e-ink price tags that they can update with a computer anyway. Not having to list prices is just 100% anti-consumer.
It was interesting moving to France. The listed prices are slightly cheaper, but not significantly cheaper. But the final bill always came or cheaper than I expected. It took me a bit to realize that tax was just included, so I didn’t have to add a mental 10% to the price of everything.
That was always a BS excuse. Prices fluctuate constantly. Having the taxes in the price wouldn’t change that.
This definitely already exists, as I am taxed for my US online purchases (e.g., Steam games) based on my US zip code already.
Actually tax collection can and often is much simpler than that. In California, for instance, we only needed to collect taxes for sales within the state. And for those who were billed in-state, they only had to pay the sales tax local to the business itself, not based on where they lived. So everything effectively had two prices; a California price and an everywhere else price.
Like many of these solutions, corporations absolutely CAN and WILL deal with it. Small businesses will eat shit and once again get driven out of markets. These rules that ignore the convoluted reality of our laws almost always backfire into "well bestbuy has the staff and time to jump through all these hoops and get it right, but oops your local tech store doesn't and is now getting bought out"
Edit-
And to be clear I think the real solution to this is to not make it so hard to comply by standardizing the laws in a sane manner rather than putting the sole onus on the business owner to comply with all the nonsense.
I don't think this is an area where small businesses suffer, especially if most of their business is local. The same software (or an equivalent) that calculates the cost of taxes now can be used on the front end. If they're doing online orders already they've probably got what they need. If they're doing those orders manually due to the peculiarities of their type of business, then they're going to do the same math for a VAT style tax manually.
In many ways this isn't that different from when I pay a flat rate at a farmers market in cash and the + tax amount on a card. They're still paying their taxes (or at least most of them are, idk I'm not their accountant) they're just baking it into their sale price, and using the increased card price to cover the processing fee.
Small businesses often do this already when allowed given receipt laws.
Again I'm not saying a sales tax is the ideal answer, just that inconvenience for large corporations advertising nationally or pricing their iPhones- which has been the focus, not small business - is not the reason not to do it.
As for in store (which feels like a pivot), prices legitimately are changing all the time. When I worked at a local dept store we were repricing things regularly. The local IGA prints off labels or hand writes them just as easily. Tax law doesn't change as often as grocery store pricing does for certain. And every gas station, from Freedom to Circle K, updates their tobacco prices regularly and clearly that I've seen at least, whether they're manually typing in prices or using a high tech POS, or whether they're committing EBT fraud. (And if they can manage EBT fraud they can manage pricing)
But surely the business owner is already complying with all the relevant tax law, they're literally just not advertising it.
Up to a point?
Again we're talking about proper price displays, so it can't just calculate "today's tax" on the backend based on item and location properties (sugary drink in new york county that cares vs doesn't).
Instead they must update all relevant pricing whenever the relevant laws change. This is not a trivial task, and an easy one to do wrong. Having your "tax guy" and "point of sale guy" work together to make sure everything is coded right is doable, having your entire floor team deal with updated pricing is a nightmare.
You see this right now with cigarettes, which can change pricing every month, or more, due to both manufacturer decisions (RJ and PM having a functional monopoly on the industry in the US) and the resellers are stuck having to jump through hoops and change signage in accordance or be punished for not complying.
Worse local government sometimes has to get involved and gets in its own way. Government employee A must place a sign following X rules, doesn't follow X rules, business gets a citation by the same government for the behavior of their previous employee. You then fight it and maybe clear it up, or maybe it doesn't really matter, but this is all time and effort wasted with the threat of your livelyhood on the line.
So again, the easier you make it to just follow the damn law in the first place, the more people will gladly do it. Little businesses and large corps don't love the "oh shit wait I forgot tax, hold on let me see if I can still buy this" surprise either, and if we simplified how we handled this stuff I think you'd see pretty heavy adoption. I'm certain there are counties or even states that could probably roll it out right now, and I would hope we can one day get there (inertia is a problem, especially when the average consumer will just say your prices are more expensive and go next door and pay the same amount in the end).
Again though, if you want this to happen in a way that doesn't screw smaller companies, it needs to be easier to comply.
I guess I just don't see why that is. "Stores update their prices when prices change" seems like the most basic aspect of a retail business. And how often do taxes change vs. how often stores have sales that require their floor staff to re-price their stock?
Literally every POS package I have ever evaluated has the ability to adjust prices with tax changes. And regardless, taxes don’t change that incredibly often. Maybe once or twice a year, if even that. Though it depends on the politics of where you live of course
It even varies within a city, there's quite a few shopping centers around the metro where I live that are special redevelopment districts with an additional sales tax that's to pay off the redevlopment bonds.
Plus, some places have asinine setups. Here in Colorado, sales taxes are remitted to each individual county and city, in addition to the percentage that goes directly to the state, instead of sending it all to the state and having them handle distribution down to the city and county level.
I don't see how there's anything wrong with that. Different municipalities have different economies, income levels, and thus standards for taxation.
As to the pricing itself, it's just how it's been. I don't think there's anything preventing the tax from being baked onto prices on local stores practically.
But it's honestly not a very big deal. You just mentally estimate how much the sales tax is going to be. Especially now that digital payments are all but omni-present, there's just not that much benefit from doing so. So the old way continues.
The thing that i think is missing is the option of just rebasing the currency. Make a dime worth what a dollar was, a penny worth what a dime was, and suddenly physical currency makes noticeably more sense. It's not a problem that we have coins, it's a problem that the value represented by the coins is too small. So change it. What could go wrong? It might feel weird to have a bunch of millionaires suddenly being mere hundred-thousandaires, but they can take the blow to their egos.
Is that something the government can "just do", though? They don't exactly decide the international (or even domestic) value of a dollar by the stroke of a pen. It's not as though they could go to their creditors and say "Actually we're only going to pay you 10% of what we agreed because the US dollar is worth more now."
It’s not worth more. The denomination just changed. The denomination is arbitrary. When you do it, it has no effect on, well, anything: exchange rates or domestic prices.
https://en.m.wikipedia.org/wiki/Redenomination
Rebasing
I suppose you would just create new dollars that are worth 10 old dollars, give a deadline for everyone to exchange old for new, after which the old dollars are no longer legal tender.
It's absolutely a thing that can be done, though generally it's done through retiring the old physical currency and minting a new one under a new name. And its not done without notice. There's oldbux and newbux, and after a year the government only works in newbux and only accepts tax payments in newbux, and everyone moves over.
The UK did it to pennies from 1971. The pound was worth the same, but pennies went from 240 to the pound to 100. 1p coins from 1971 say "new penny" on them, but the name still didn't change while the value did.
It would be strange to try and mandate that money already in circulation be more valuable. Much more straightforward to introduce new coins in larger denominations, like they have in the European Union. We tried this previously with dollar coins, which were unpopular for various reasons. I do think it is still an achievable goal.
In the long term, I would be happy if 50 years from now we phased out everything less than a dollar and had a currency system based on whole numbers, like the Yen is now. For now, quarters are definitely still useful.
That makes sense to me, mostly because it isn't clear what is supposed to happen if you get rid of coins completely. If I have a jar full of them, are they just trash? Or can I take them to the bank and get money for them, and maybe the bank gets credit from the treasury?
If we rebased the currency, there would likely be a period of time - say a year - to "turn in" the old money for new. If we discontinued coins, there's no real reason to limit how long those could be turned in. They have not lost any value, they just aren't being issued anymore. If you had a stash of hapennys from the 1800s, it would be smart of the government to allow you to turn those in for face value - although in that case, of course, you could sell them for more money than face value.
Hmm but if you just stop issuing a certain coin it will still be in circulation for years, and just be kind of annoying. Then I think a lot of places would refuse to take them. There are already stores that won't take cash at all, and this is apparently legal.
I don't see that as a problem. Already if you have any decent quantity of these coins, you basically have to take them to a Coinstar and pay to have them taken (or some options for free, but still, it's not just cash, basically). Or a coöperative bank.
So stopping the production of these coins just means that businesses will have to start rounding to the lowest remaining denomination - like gas stations do with their 0.9¢ prices, rounding to the nearest penny. Stores will simply round to the nearest quarter for cash purchases, and perhaps keep pennies for card purchases (because no reason not to).
If you stop issuing these coins, they will fall out of circulation quickly.
Or businesses could choose to continue to accept them from customers, but give change out to the nearest quarter only.
No matter how it shapes up, these are very tiny problems at worst, in my humble opinion. The entire point is that these amounts are very small.
Then that incentivizes the person who has the cash in the old denomination to go to a financial institution that will exchange it for the new denomination. This isn't rocket science -- people in parts of Germany managed to do so more than once within the same decade.
I knew that pennies cost more to make than they are worth, I did not realize just how bad nickels were.
$210 million to make nickels and $118 million to make pennies each year could be used to do a lot more than making coins that are a net negative at this point.
I say we ditch the nickel and the dime and just round prices up/down to the nearest quarter.
This is the conclusion he reaches in this video - it's the only thing that makes sense with how rounding would work so you didn't land on values in between coins.
Ditch all cent coinage, maybe have $1 and $2 coins and a $200 note. I might be a little more tolerant of cash if I could count on never having to deal with cents. Ideally never coins.
I’ve been leaning towards this myself. I believe that all cash should actually be able to buy something, but you can’t even find those candy dispensers that will give you a gumball for 25¢ anymore.
Maybe bring back the half dollar. But make $1 and $5 coins instead of bills for sure.