I don't know what you mean.

The US doesn't have VAT, it has sales tax, which varies geographically by a great deal.

And advertised prices in the US virtually never include sales tax (in large part due to that variation).

Hotels and ticket brokers aren't getting any kind of free pass, they're advertising prices in the same way as everywhere else like the grocery store or clothing stores -- at least as far as sales tax is involved.

Literally the only locations I've ever encountered that include sales tax in the price are a tiny minority of coffee shops (often cash-only) and budget pizza places (often the dollar-slice ones), which is to avoid having to deal with coins.

(The article is about other fees though, which is a different subject from sales tax.)

As an American who has lived abroad a fair bit, I can confirm that the American approach seems deranged if you're used to prices that match what you will pay.

I mean, it certainly does seem that way.

But the problem is that right now a supermarket chain can advertise in the newspaper that chicken breasts are $4.99/lb at all of its nearby locations.

If sales tax were included, you couldn't advertise prices at all, because they might be different at each store!

How could Apple advertise the price of a MacBook, when sales tax is 0% in New Hampshire, but 8.875% in New York City, but 4.5% in Yonkers just north of NYC? That's a price variation of around $100–200.

Fair point on the advertising. Perhaps a good compromise would be to mandate displaying the price with the taxes included in store/on the website so what you see is what you get when you checkout with no bad surprises.

VAT rates in Europe differ too but it doesn't seem to cause any issues with advertising :)

That's because VAT is nationwide.

You already have to produce different ads in Spanish, Italian, German, etc. So it's not really any extra work to have different prices in each.

Plus you're only dealing with tens of countries. There are literally thousands of distinct sales tax geographical areas in the US.

What are the boundaries where VAT rates change? Within the US, there can be state + county + special tax district in the county + city + special tax district in the city.

That may not be super sensible, but it is how it works. A business on one side of the street may have to collect taxes at a much different rate compared to a business on the other side of the street.

Plenty of things vary by location. Rent and wage have a bigger impact than sales tax on the final price in a supermarket. Yet they are able to coordinate sales prices even when the rent varies a lot, because anyway those are loss leaders and then the rest of items get the proper markup and differentiated prices depending on the location. Just like you have items in the RU with the same promotion prices in countries with 15% VAT and countries with 25% VAT, usually because you want the nice rounding at, say, 399.

That's not really true as a general rule. Grocery stores, for example, have an average profit of just 1–3%.

Attempting to maintain the same final prices in one town with 3% sales tax and a neighboring one with 8% sales tax simply isn't workable.

That's the profit margin across all products. Consumers are not rational (or at the very least, not infinitely knowledgeable and able to use that knowledge instantaneously), so you would absolutely expect effects like charging 4.99 rather than some tax-adjusted number like 5.18 to translate into real profits.

Individual items can have >100% markup, there are items sold at a loss to ensure you can complete your trip at a single store or get you in the door or whatever, and the store absolutely has to consider how revenue (not just line-item profit) plays into things to balance out rent and wages and whatnot. 1-3% profits for the store don't imply much about what you need to charge to offset the effects of sales tax.

As a brief example of irrationality, last I checked, on like-new iPhones it made a 30% difference in total revenue to offer "free" shipping rather than split it out as a separate line item. People would really rather pay 1.3x with "free" shipping than 0.8x base price and 0.2x shipping.

I don't, and will never understand this argument, because here in Europe, the Tesco in my town centre has a different price for the exact same item to the Tesco Superstore on the edge of town which also has a different price to the little Tesco Express down the road.

Somehow this all works magically here but in the US it is impossible because.. reasons unknown

So where you live there are no standardized prices by any chains at all for anything? No prices are ever advertised anywhere?

You're drawing an unwarranted conclusion that just because not all prices are coordinated, therefore none must be.

If you consider that, I believe your reasons unknown become reasons known. No need to resort to magical thinking :)

Are hotels unaware of where they are located and so unable to determine their prices? I'm pretty sure that the cause of the collapse of the Pax Americana at this point will be the willful conflation of American Exceptionalism into learned helplessness.

See my sibling comment to understand.

Also it's not just about the hotel location, but also changes depending on the buyer's location -- which of course often isn't known until the checkout process.

So maybe it's not quite so simple, with so cartoonish a villain, as you assume.

Is it so complicated that only Europeans can do it; Americans are too unintelligent to match?

Please stop being rude and chauvinistic.

If European countries chose to have VAT that varied geographically within a country, they wouldn't be able to build it into the price either.

Why you think it has anything to do with "national intelligence" is quite beyond me.

Well…they do… https://taxfoundation.org/data/all/eu/value-added-tax-2023-v...

No they don't.

That clearly shows rates varying between countries.

Not within a country.

Which is fine, because prices are generally advertised within a country, not Europe-wide.

You're showing tax variations across countries. I see tax variations within a couple of miles!

I'm curious where you have ever seen a national advertisement for a hotel room that includes a price; it is not something I've observed but perhaps my chauvinism has blinded me. That said, do you think that a hotel company is able to calculate the price of a room when I go onto their online portal and request a price for a particular location and date?

The usual strategy is to nationally advertise "as low as" some base $$ amount. And then you go into the online portal and come up with an actual price for an actual date that (hopefully) includes all taxes and fees--and is probably a fair bit more.

Perhaps the Americans chose poorly.

In certain states, some customers such as disabled veterans are exempt from hotel occupancy tax. So the tax rate isn't necessarily the same for everyone.

When I book hotels/rental cars/etc. online, you can usually see what the all-in price is going to be. But when comparison shopping, you have to keep an eagle eye out because the difference between all-in and base price can be 25% or more. (Also pre-pay/no cancel vs. paying at arrival and having some ability to cancel.)

Prices are done without taxes in the US and Canada due to the anti-tax lobby. The theory goes if people have to see the figure they are taxed each transaction they will more loudly complain about the rates and more strongly resist raising the rate. In practice all it does it make it annoying to figure out what something costs.

It’s not a theory, it’s so you are informed. The tax you see up front is a tax on you the consumer, not the business entity

In practice it works. Sales tax averages around 5% in US states, and over 20% in Europe. When I lived in the states, everybody knew what their local sales tax rate was off the top of their head, and most knew the last time it was raised. Here in northern Europe, nobody really knows. Out of sight, out of mind.

Because for the last 50 years or so there has been a vast effort to erode the regulatory power of our government. From the FDA and EPA, to the education system and more -- these institutions have either been captured by industry or starved for funding.

The result is that business can do pretty much any ani-consumer thing they want and there is nobody to stop them.

Much of the federal government's regulatory authority shouldn't exist in the first place, and stems from an overly broad interpretation of the Commerce Clause. Hopefully we will see Supreme Court decisions which overturn those precedents and eviscerate the power of most federal agencies. Most issues should be left to the several states, or if federal authority is really needed on certain issues then let's pass narrowly targeted Constitutional amendments to that effect.

So when companies are dumping so much hazardous pollutants into local water so that the river catches fire[1], who's responsibility is it to deal with that?

https://case.edu/ech/articles/c/cuyahoga-river-fire

If the problem is contained within one state then the state government can deal with it. If there are significant levels of pollutants flowing downstream to another state then that would be a federal issue under even a very narrow interpretation of the Commerce Clause.

So most major waterways affect and are affected by interstate issues, especially when you take into account watersheds that feed into them. And anything you put into the air by definition is going to be impossible to contain within just one state. And the ocean is by definition an interstate issue by default.

So maybe we need some kind of federal agency to, you know, protect the environment.

And since 90% of these issues affect the nation as a whole, and this agency would have the most data, maybe it could, like, set some rules for everyone to follow so we have consistency. That way you don't have to figure out 50 different sets of rules to do business in this country. And 50 states wouldn't have to spend all their money just to re-learn the same lessons independently.

And then we are right back at the issue that strong federal regulation is the only efficient and effective way to run things.

All of those agencies have larger budgets and more power than they did 50 years ago.

I haven’t looked it up, but is that true on a population percentage and inflation adjusted basis?

IMO part of it is anti-gov libertarians who want any tax to be as painful and annoying as possible.

This is an interesting take ... libertarians are responsible for hotels not including VAT in their totals? Hmm

Certainly US republicans want to make people angry about taxes

Everyone should be angry about taxes. We work our ass off and. so much of it is eaten up by taxes.

Exactly

I agree tangentially with the sentiment—specifically in the US, we should be judicious about how our money is taken and used.

Not because we work our asses off, rather because it’s our duty as electorates (not to mention general good practice to watch your finances).

Spending is the issue, complaining about taxes in isolation is just silly.

The focus on taxes is just a smoke screen so you don’t need to offend anyone by suggesting you actually cut spending on say national defense, GPS, weather forecasting, etc etc.

If you actually want lower taxes propose specific spending cuts. Let’s get rid of police and prisons and then see what happens, or no how about…

The recent surge of inflation is in the double digits, exceeding most state taxes while solely funneling money to the rich.

Taxes and the governments they support are still a huge net benefit. You can quibble about kinds of spending but then you’re going to offend someone who wants that spending thus the silly focus on taxes. Can’t cut police because people want that, can’t remove GPS, can’t cut veterans benefits, can’t…

But hey leaching off other people is a time honored tradition.

Parent comment was talking about VAT taxes in the EU and you're harping on libertarians and republicans in the US? Strange

I generally assume when people say VAT in a general context they also mean sales tax (and the reverse)

I read the original comment as it didn’t make sense that prices in the US aren’t inclusive of taxes.

It’s less about harping on political ideologies and instead provided rationale as to why US prices aren’t transparent.

The commenter who brought up Sales tax variations is partially correct, and the lack of political will to adopt a progressive consumption tax is also partially to blame.

I think both can be good. We should know how much of a purchase is tax. We should also know upfront. I also think it's okay to question if a tax rate is appropriate and if the money already being taken for tax purposes is being spent well.

A much, much simpler explanation is that not including taxes in an items price increases the likelyhood of a consumer buying the product. Once a consumer goes to pay for a product, either online at checkout or at the cashier, they're much less likely to back down from a purchase.

This is a conspiracy level explanation. Do you really think middle aged Americans are surprised by taxes every time they buy groceries? "Oh, darn, the total cost is unexpectedly higher, how could I forget about the sales tax... that I see on every check every day for 50 years."

I mean it is inconsistent and there is really no way for an average American to know how much they will pay in tax at the grocery store. A prepared sandwich has tax, but sandwich ingredients do not. Depending on which side of the county line the store you’re shopping at is, a bottle of soda could have tax or be tax free. Sunny D might have tax while concentrated orange juice does not. Etc.

They get away with it by using fine print that discloses additional charges.

If you think how we handle sales tax is odd, just wait until you see a medical bill from the US!

for a non-American answer: in countries with VAT, tourists are not required to pay VAT, although domestic citizens are. The hotel will often service both foreigners and domestic citizens, so it charges a rate without VAT to tourists and a rate with VAT to domestic citizens. Unlike most businesses where most of their clientele are domestic citizens, hotels are special in that most of their clientele are foreigners, thus hotels are permitted to advertise a rate without VAT.