I learned, from HN actually, that the reason for this is actually because taxes must be included and enumerated so that the public know the rate and thus can be cognizant of taxes levied against them. Probably goes back to the founding of America being a country that started in large part out of a rebellion against taxes.

While at this point it makes more sense to come up with a new law/methodology, I understand the thought process. If an item is $5 final price you don't know how much the tax actually was. The taxes can be raised easily and only those paying close attention to local or state politics would know. It's a backstop against government greed.

Again, I think we could reform this tax code and tip culture. However, I believe you legally have to include the tax. Maybe you simply should only be able to advertise the final price, but on the receipt it shows the tax rate.

All the more reason why everyone should be forced to do quarterly estimated taxes (like 1099 or non W2 workers do) instead of having the amount automatically withheld every paycheck by the payroll system.

Having the money 'in your hand' and then having to write a check for thousands of dollars feels much different. The guillotines would appear quickly.

That’s why it doesn’t happen, obviously. The entire roll out of the first federal income tax in WW2 was designed to be ‘invisible’ to your average American exactly because of the guillotine concern.

And it still widely works - queue all the folks happy about ‘getting their money from the gov’t’ in the form of their tax refund at the end of the year.

It’s just as trivial to show the tax portion on the receipt and I’ve visited many countries that do this.

I think the reason taxes aren’t included are because lower prices make people buy more. Similar to $4.99 sells more than $5.