Went to a restaurant in LA today and when I got the check I noticed that it was a bit higher than it should be. Then I noticed this 18% service charge. So… We, as customers, need to help pay for their servers instead of the owners paying their servers a living wage. And on top of that they have suggested tip. I called bs on this. I will bet you that the servers do not see a dime of this 18% service charge. [deleted a word so it wasn’t a grammatical horror to read]
Still seems mad to me that usalanders don’t have tax included in their advertised prices.
The primary reason is that taxing is done at state, country, and city levels and they all apply different amounts in different areas. The tax can vary just crossing out of a city and into an unincorporated area or between neighboring cities. So rather than having different prices when you provide services for customers in different locations, it’s easier to separate it out.
Like I used to do tech support for small home based businesses mostly, and so I didn’t have a “place of business”. I had three sets of customers, one lived in my city and county, another lived in my city but a different county, and another lived in that second county in a different city.
Originally, I was just charging a set hourly rate and eating the tax cost even though it was a pain to figure out the math. The problem came when with some of those rates, because of rounding, charging that amount for one hour might work ok, but charging that same amount for 2 hours or 3 hours would make it off by one cent and there was no way to reconcile it for the accounting software and tax forms and such. And I didn’t want to charge pennies. So I just made it easy and all new customers I charged tax separately.
That one is annoying but also makes perfect sense when everyone is competing with everyone. The business with honest prices suffers when their nearby competitor doesn’t include it and looks cheaper. The states lose out on revenue if they force businesses to display full prices but the state next door doesn’t, or has better tax rates. They all benefit from confusion.
Where there is not confusion is the border with a state with no sales tax, and all the good shopping is found on one side.
For a real fun US-ism, fuel in the US is charged at fractions of a penny (9/10s). As any Office Space fan can tell you, that adds up.
Fuel in the UK (and most of Europe I believe) is charged in tenths of a penny too.
Is there not a way to make it a nationwide requirement to advertise including tax? I know very little about US economics so there might be a very good reason, I never really thought much about it beyond “huh, that’s weird” to be honest.
I don’t think there is an easy way to make it nationwide, the powers of the federal government include interstate commerce but the sales taxes are at the state or local level.
Yeah, that seems mad. What’s the reason? Why can’t it be set at a national value like the rest of the world? Is it simply historical and too many powerful people’s pockets would get lighter if it were changed? I’m sure there’s a reason, I just can’t see it.
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