Sales Tax Drama

Aug 21, 2013 by

I had just gotten through customs at the Seattle airport and found myself back in America after almost ten months abroad.  I felt giddy and, after a quick phone call home on a pay phone, I decided to celebrate by getting something at Starbucks.  After scanning the menu and finding the item I wanted, I determined that the price was acceptable.  I got in line and ordered my frappucinno from the barista (I pretend to like coffee, but I really just like shakes).  I was just about to pull out my wallet when the barista told me the total was $4.33.  I paused for a second and looked up at the menu board.  No, I had not misread the sign; my drink was supposed to be $3.92.  I pointed this out to the barista and she explained that I have to include the sales tax.  I blushed, embarrassed that I forgot that we do that in America, paid for my drink and walked away.

the expensive Starbucks drink

the expensive Starbucks drink

Shopping in the United States is a different experience than shopping in Europe.  First of all, I don’t have to mentally convert all the price tags into U.S. dollars to get an understanding of how much something really costs.  But the second biggest difference is that European countries include the sales tax in the sticker price on items, while the U.S. does not include tax until the cashier rings up the items at the register.  This means that a person shopping in the states ends up paying more than what the price tag says.  I have heard it said that this is a good thing because it keeps us mindful of how much we are really paying in sales taxes.  If we are constantly reminded of how much we pay in sales taxes, then we will be able to make a better judgment when the question arises whether or not to increase this tax.  But is it true that this is the only way to keep us mindful?

sales taxI find that not including the sales tax is more of a bother than a benefit.  Most people who buy things on a regular basis know what the sales tax is in his or her state/country.  Does not including it on the price tag affect how much one is taxed?  I don’t think so.  In countries where the tax is included in the sticker price, the sales tax paid on the item(s) is calculated on the receipt, just like it is in the U.S.  It’s a bother to have the sales tax not included on the price tag because it insinuates to the customer that an item is cheaper than it really is.  This seems slightly deceitful to me, more deceitful than including the sales tax in the sticker price.  If we really wanted to be clear about our taxation system, why not include both prices on the tags so we could really see the difference?  41 cents may seem like a petty difference, but I might have passed on my icy drink if I had known the true cost of it from the beginning.  Sometimes, I just want to know how much my frappuccino is really going to cost me before I get to the register.

 

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3 Comments

  1. Gerber

    But, the counter-point to this is that here in America, we have a different culture about it. We may not have sales tax calculated ahead of time, but the nation knows that you have to account for that. And, while the purpose of not listing the price with sales tax is no doubt so businesses can make money, isn’t it true that this idea goes along with the American Culture? We distrust the government and we, as a people, want to always be informed of where the government has extended and in how much they are taking from us.

  2. Heather

    You say that ‘we, as a people, want to always be informed of where the government has extended and in how much they are taking from us.” Well, wouldn’t labeling the price both pre- and post- sales tax, as I suggested, inform us of just that?

  3. Gerber

    Too complicated. That is making an overt statement that most companies are not going to want to make for fear of criticism from our overlords. It seems fine and more enraging the way it is.

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