One thing I can guarantee when I go abroad on holiday is that within a week or so my trousers will be around my ankles. This is neither because of my irresistability to the local ladies, nor because I only wash my trousers once a week, although the wife can testify that one of those isn’t entirely false. No, dear friends, this is because my pockets are full of coins. Like anyone else trapped in a world where they can’t add up coin values at speed, I am forced to hand over notes in shops and I never manage to get rid of my change.
I moved to the U.S. two years ago, and even now my pockets are full of change. But why? I understand how to add up the coins now. Well, I was contemplating this in a bar the other day and it dawned upon me what the problem was. The problem is that Americans quote prices without sales tax, so it is physically impossible to sit in the queue at the supermarket waiting to buy milk and idly put together the exact money it’s going to cost you. Although it says clearly on it “99c”, it’s not going to be 99c. It’s going to be 99c plus sales tax, which is not something worth bothering to idly work out in the supermarket queue.
Why? Why must this happen? Are there that many people that will be reclaiming the tax from baby formula or plastic cutlery? Are the stores thinking that you won’t realise the price of a banana until you’re standing at the checkout and it’s too late? Are they trying to show how little profit they’re collecting, on the assumption that most customers are well-versed with the wholesale price of bread?
The problem is that sales tax in WA (and most of the US, I think) is determined on a very local basis. A chain store has no dillemma here; to inflate the advertised price of the product to match the actual price plus the (wildly) varying local sales tax would be a good way to go out of business. Showing the lower price, while blatantly false in your estimation, is the best way to coax (trick?) customers into buying their wares. Doing otherwise could lead to losing sales to that wanker of a competitor across the street in the next zip code with cheaper sales tax.
People from outside Washington State do not have to pay it. If Washington resident purchases something outside the state to be consumed in the state then the resident pays the sales tax when returning to Washington
Sales tax led to the introduction of the take a penny leave a penny tray something missing in the UK. The real problem is US money, smallest denomination of coin should be 5 cents, smallest bill/note $5
You’re missing the point. That change in your pocket is your ‘savings’. You’re supposed to pile it up at the end of the day in an oversize Coke bottle, hollowed-out likeness of Mickey Mouse, or wicker basket. Generally, this attractive object should sit proudly in the corner of your bedroom, so your wife can appreciate your ingenuity.
Then, in 4 or 5 years, you can afford to take your wife out to dinner with 235 pounds of change. See? A savings plan. They’re actually helping you out. Plus, you get an extra bonus of fun if you actually pay for dinner with the coins.
I don’t think you should be getting charged sales tax on food items.
Couldn’t agree more! Woolco tried posting tax-inclusive prices here in Toronto for a while, but it didn’t last. I once asked in a big store why they didn’t quote inclusive prices to make things easier for everyone, and the answer was that “It’s too much trouble working out the new prices when tax rates are changed”‘ Cobblers! Tax rates change once in a blue moon.
I couldn’t care less if they quote prices with or w/o tax. I live in one state after all, with one tax rate, so price comparison is possible regardless. And to solve the change problem, use plastic to pay in the stores (uhm, shops). Paying cash is so last millenium.
The best thing to do with those coins in your pocket, is to spend them at the cashiers station where the “kids” work. If something costs $11.65, give them $21.65 and watch the stupid look that covers their face. If only the registers didn’t do the math for them…
America was founded on the notion that taxes were a bad thing that you needed to revolt against, so this is just a reflection of that mindset over the years. Think of how many angry mobs dumping starbucks coffee into the nearest body of water this approach has averted over the years. So why not keep it out of sight and mind until the last moment when you have to pay them whether you like it or not, or risk the hateful gazes of the other shoppers in line. Nobody likes paying taxes but without them society would not exist as we know it, and don’t we all sound more civilized with the “Tink, Tink” of coins in our pockets.
Ah but if the UK had done this then how easy the recent VT drop would have been! and how instantly we would have seen it – instead I have to do lots of tedious finacial crap at work and when I go shopping the prices haven’t even changed! How unfair!
but yo’re right of course – the US is crazy with the whole tax thing – sometimes there are two to add on!
Indiana doesn’t tax food items!
Yessum, in response to a few of these, I got somewhat carried away. I don’t think Washington does sales tax on food either. I’ve decided it was a test of whether you were paying attention.
James in comment #1 nailed it right on. Sales tax is local, sometimes three tiers of it plus a bracket system (if amount between 0 and 10 cents, tax is one cent) instead of a flat percentage – they don’t want those fractions of a cent getting away from them (bastewards!).
Florida has 67 counties, over a dozen different tax rates statewide, some are 6%, some are 6.25, 6.5, 6.75, 7, 7 plus local option, you name it. Colorado has over 300 different tax rates.
Makes it tough for internet sales – anybody know a good programmer who can do Florida sales tax rates by zip code referencing county, plus various local options as well – and the damn things keep changing, too . . .
As an American (Michigander) I feel that Greg above has the answer spot on.
This is why we own a national debt of over $10,000,000,000,000.
Goverment pays its bills with taxes collected right?
This may be a pointless add-on, but speaking of the variety of tax rates… In the capitol of Illinois (Springfield) the tax is 7.75%, but as far as I can remember it’s near 13% (or so) in Chicago. So when my father bought a book in Chicago, then brought it back down here to find out I already owned it, we decided to returned it to the shop of the same chain in Springfield where the poor bloke at the counter was baffled (of course, he had to return the full, 13%-taxed money… begrudgingly).
This is of course why I’m also amazed when people travel to Chicago and buy something they could have bought in Springfield–I mean, they’re just paying more money for the same thing.
This would drive me nuts to. Which is one of the many reasons I love living in Oregon, we have NO sales tax. The price you see on the tag is the price you pay.
But clearly the store could include sales tax when they post the cost of the item. The store is not moving from one tax rate to another.
As for saving coins, a pound of change is about $20. Recently weighed my huge water bottle of change, 75 lbs. So the habit of tossing your change in a jar means in a few years that you can buy a new plamsa TV.
One that I have heard from Michigan is sales tax is charged on the entire purchase not on the individual items. Total taxable items is $100.00 sales tax is 6% or $6.00. Individually the tax could be higher or lower.
$25 = 1.500 $24.99 = 1.50
$40 = 2.400 $39.78 = 2.39
$15 = 0.900 $15.13 = 0.91
$ 8 = 0.480 $ 7.50 = 0.45
$ 2 = 0.120 $ 2.27 = 0.14
$ 3 = 0.180 $ 3.23 = 0.19
$ 1 = 0.060 $ 0.44 = 0.03
$ 1 = 0.060 $ 1.56 = 0.09
$ 5 = 0.300 $ 5.10 = 0.31
6.00 6.01
Both cases total item cost $100, but two different, albeit negligible, a penny more in tax due to rounding.
I love that when I shop in the UK I pay what the label says.. however, I pay a crap load more for just about everything…so the upside is negated… and, the worst tax of all in the UK.. the TV tax… what the F is this about… supporting BBC.. so glad my money goes to pay huge salaries of BBC presenters, management, etc…if it’s the quality programming everyone wants, then let ’em go private and get their money via private fundraising…. I hate paying for the BBC. But rebelling against the TV tax is kind of like saying “hey, how ’bout we kill the Queen”. It’s too much a part of the collective nostalgic subconscious…kind of like black pudding.
This is the second post I’ve ever read on this blog. (Love it, btw). It’s also the second time I am smiling and nodding at Matteo’s comments. We think alike…I ran into some fellow Americans in Dublin a few weeks ago. They were from Chicaco. They said they had a neighbor from the UK complaining about the car parking tax they have to pay. I told them to remind him about the tv tax he used to pay.
Ok, I’m an expat brit living in Michigan. How about I run a business here, say a bar, pub, grill, or other sort of entertainment facility and price everything as tax inclusive, i.e. what you see is wahat you pay? How would you react to that?
What if also I put up a sign to say “We don’t expect gratuities. Please only tip if you wish to”?
Why do the Americans not join the rest of the world and display the
Price one has to pay at the checkout? You cannot get out the establishment without paying the tax, so why not show the real price? Also, as there is already a minimum wage in the states, why should waiting staff rely on tips for their wages? They are already getting paid to do their job. You do not tip the cashier at the supermarket checkout……
orange peel Most of the waiters and waitresses don’t get paid minimum wage. because gratuities are expected they are allowed to be paid less. it is an odd thing though I agree
This is one thing I would change in the US: display prices w tax. The point people make about different counties, etc is meaningless. As a consumer, I pay the full amount and I doubt anyone has an option to claim tax back unless you buy smth for a registered business. If TV costs a 100 + 10 say it on the tag 110, just like in Europe w VAT. IT’s annoying and totally misleading to the consumers. Forget the signs that say tax will be added. The same sh.t with CRV. Some shops in Cali quote the prices w tax already. Time for a change!