Bizarre though it may sound, some politicians in America are in favour of badly designed tax systems, for anti-tax reasons.

By making tax as difficult as possible, they recruit supporters for their anti-tax stance, and they can claim they're delivering on their anti-tax policy by 'making the system collapse under its own weight' or 'making everyone aware of how much tax they're paying' and they can allow loopholes and fraud opportunities and they can collect donations from tax preparation companies.

It's the same here in Germany as well, was also the same in Greece and Turkey. I guess the whole Europe is like this, if not everywhere except the US :)

> The question is, does the tax matter so much it's worth putting it on every price sticker

Especially considering the fact that usually there are 2-3 rates tops, so one can easily remember that 5-10-20% of what they pay goes to the country coffers depending on the product being bought.

I can think of at least one reason where tax calculated on the final total vs each price is better (for the consumer), rounding. With tax calculated on the final total, you pay at most $0.01 extra in rounding “errors”. However with tax calculated on each price you pay at most number of items times $0.01, which is more and could add up over time. I personally want to give the gov as little of my money as possible.

That depends on whether they're rounding, or taking a floor or ceiling :). With proper rounding, it's a wash. I just did some back-of-the-dev-console calculations on a random groceries receipt I found on my desk, and I discovered that if the tax was calculated per item, I'd pay 0.01PLN less of it!

Regardless of the rounding method, the fair way is to sum up purchases and compute tax on the total, precisely to minimize the loss of precision on rounding.

Curiously, as far as I understand the Polish tax code (IANAL), the choice of the method to use is actually given to the vendor! The law recommends[0] that you calculate the tax by multiplying the rate with the total taxable amount, but also allows[1] the seller to choose to calculate per-item tax, and sum that. In both cases, mathematical rounding (half-up) is used[2].

But in practice, there's little to no difference unless you're doing a single purchase of a lot of items with weird pricing bias.

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[0] - Dz.U.2020.0.106 t.j. - Ustawa z dnia 11 marca 2004 r. o podatku od towarów i usług, art. 106e., ust. 7.

[1] - ibid., ust. 10.

[2] - ibid., ust. 11.

> That depends on whether they're rounding, or taking a floor or ceiling :). With proper rounding, it's a wash.

Agreed! If they are actually rounding it will be a statistical wash.

> Regardless of the rounding method, the fair way is to sum up purchases and compute tax on the total, precisely to minimize the loss of precision on rounding.

Again, agreed, this is why we do it this way in the US.

> Curiously, as far as I understand the Polish tax code (IANAL), the choice of the method to use is actually given to the vendor! The law recommends[0] that you calculate the tax by multiplying the rate with the total taxable amount, but also allows[1] the seller to choose to calculate per-item tax, and sum that. In both cases, mathematical rounding (half-up) is used[2].

US tax code, at least as far as income taxes go, uses the same rounding method (nearest decimal) however sales tax is can be quite a bit more complicated [1].

Also somewhat related, we quote our fuel prices to 3 decimals.

[1] - https://blog.taxjar.com/rounding-issues-sales-tax-returns/

This assumes VAT is always rounded up, which is not the case in e.g. Germany where it is rounded to the nearest cent - so the average rounding error cancels out to 0.

Note i said generic tax, not VAT. And I’m specifically talking about the US