I suspect the "how" is that we just never got the regulation that would prevent it because the 'small-government and low taxes' are aligned perfectly with the large business interests which tend to fund all campaigns. The "low taxes" types want to maximize the sting of all forms of tax and this is a great way to do that. And the businesses appreciate the psychological benefits of being able to show the minimum possible number. Even if a "display only the final price" rule applied to all a consumer's options, we probably just buy things more when they're labeled as "$99.99" instead of "$109.99."

For extra fun, consider how phone bills attempt to "pass through" their own tax obligations, which have little to do with your own incremental usage, in the form of 'recovery fees' tacked onto bills. I suspect we'll eventually see those creep into all kinds of transactions, especially among other monopolistic/oligopoly businesses where you have little if any choice.

> we probably just buy things more when they're labeled as "$99.99" instead of "$109.99."

That's basic price elasticity of demand and entirely unsurprising. When something costs 10% more, people buy less of it in general.

We also buy more things priced at $99.99 than at $100.00, which is more of the psychological trick than it is rational price elasticity.

The 2 largest retailers on earth have discovered that the x.99 prices make you less money than pricing at x.99 plus some arbitrary number between .99 and .01.

I’m imaging it’s because states and even cities can have differing sales tax rates.

Hard to advertise to a wide audience when the final price after tax is one of 12 different prices depending on where they live.

That's a weak justification to apply to prices listed right where the product is sold. Like, if one uses a sticker gun to put a price tag on a product itself.

I don't know of any US businesses other than waffle house that always include all taxes in the listed price, however.

There are laws against adding in taxes on listed prices in places like NJ, likely others as well.

Regardless, I'm not sure why people consider it such a big deal. It's consistent across the board and it's relatively basic math to estimate what the total would be.

I've lived in places that do it both ways and it's a non-issue.

I think the EU law on that is the "Price indication directive", and AFAIK, it's been around since 1998. (may have replaced an earlier directive, my google-fu is lacking)

I think the norm is to show whatever price you want, with some countries banning that for fairly obvious reasons.