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Comment by bbanyc | Hacker News Reader

Many foreigners are puzzled about why we Americans complain so much about our taxes, when they aren't particularly high by global standards. A major reason is that our taxes are particularly intrusive and annoying by global standards.

This also goes for consumption taxes - a 9% sales tax added at the register feels more intrusive than a 20% VAT included in the price tag, even though the VAT is much higher.

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One big reason why the sales tax is NOT included in the price of the item, is that the sales tax you pay is deductible from your federal taxes. To prove the amount of sales tax you pay, should you choose to itemize deductions, you must have itemized receipts.

With itemized receipts, you have a line for the sales tax which serves as proof, if the tax were included in the price, you'd then have to have special indicators for which items are taxable on the receipt, and then calculate for each item on each receipt.

When I just did my taxes, it was sales tax or state + local income tax. Given that I live in NYC, state+local was higher than any reasonable esitamtion of sales tax.

Ahh, yes, I live in a state with no income tax, so sales tax deduction tends to be substantial for me.

Including the tax in the advertised price doesn't prevent it from being separately listed on the receipt. It'll say something like "Total $120, Included Tax $20" instead of "Subtotal $100, Tax $20, Total $120".

I've been to the US a few times, and it puzzles me why you don't add the sales tax into the price. I mean, it's a certainty it will need to be added, you can't not pay it, so it's a sane default for 99% of cases (if you have some sort of reason not to pay, you can just think of it as a discount on price).

Why waste all this time from millions of people tens of times a day just to add 9% to a price?

Part of it is that sales taxes are set by the state, and in some cases, municipality/city, since there is no federal sales tax.

For example, in Massachusetts we pay a 6.25% sales tax. Though across the border in New Hampshire, there isn't a sales tax at all.

Hmm, you mean it's easier for inter-state businesses to have unified catalogs? I think local businesses wouldn't care much about that, since they're located in one state, no?

Or do you pay different amounts of tax based on where you live, rather than where the business is?

Sure, it also makes the prices look lower.

I believe that if you buy in tax-free (Salem) New Hamsphire but bring the goods back into Massachusetts, you are supposed to fill out a MA tax form. Assuming you are a Mass resident

Yes, that's called a Use Tax, and it applies to things like Amazon purchases as well if they cross state lines and you weren't charged sales tax on the purchase.

One argument I've heard is that it keeps you aware of how much tax you're paying.

Just the opposite is probably more important. Since sales taxes can vary locally (city, county, state) hiding the real price prevents people from noticing they can get cheaper goods by driving across an imaginary line.

Example: There is a walmart in both Cityville and its suburb Township. Cityville has a 9% sales tax but Township has a 7% tax rate. Both stores can advertise that they're selling a tv for $500, even though it costs $545 in Cityville but $535 in Township.

This helps prevent people from driving to the Township store to save money, because the advertised price is the same and most people won't think about the tax rate difference.

Where is the wasted time? I think foreign tourists get hung up on calculating the tax themselves, so they know how much the bill will be, while most Americans just pay the total that gets rung up.

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