When the Australian government introduced GST a few years ago they did one thing right – they encorced that the GST had to be included in the price that was advertised for whatever it was you were selling.
So if something is advertised for $10 – that’s exactly what it’s going to cost you. No extra taxes, charges, or anything else.
Unfortunately the USA doesn’t have the same concepts. I recently bought a digital photo frame ($69.99) and a coke ($1.29) from an OfficeMax store in San Francisco. To an Australian the total price should be simple – $69.99 + $1.29 = $71.28. But no, not in America…
First the $69.99 photo frame. In addition to the listed price there’s a $6.00 “CA Disposal Fee”, which apparently applies to all computer monitors and CRTs (is a Digitial photo frame with no computer connection a monitor? Apparently it is). So we’re up to $75.99.
Next there’s Sales Tax, which in CA (or at least this part of CA) is 8.5%. But the Sales Tax doesn’t apply to the “CA Disposal Fee”, so it’s 8.5% of $69.99, giving a total price for the $70 photo frame of $81.94 – 17% higher that the listed price.
Next the bottle of Coke. $1.29 according to the price on the shelf, but that doesn’t include the 4 cent “Deposit Redemption” ($1.33) or the 8.5% sales tax (which appears to also apply to the deposit) – so $1.44 total, or only 12% higher than the listed price.
All up, the two items that were listed on the shelf at $71.28 ended up costing me $83.38.
Of course it’s not the actual cost that annoys me, it’s the fact that you have very little idea of what something is going to cost. Can you work out 8.5% of $69.99 in your head? What if, like me, you didn’t even know the existence of the “Disposal Fee”?
The Australia method, where the price on the ticket is the price you pay – taxes and all charges included – is far, far simpler…