Tax-inclusive Pricing

April 7th, 2014
money, taxes
Why don't price tags show the after-tax price? In most countries this is standard, and in the US we do require it for a few things like gasoline and airline tickets. It's much more convenient for consumers because you know what something's going to cost and can have your money ready. The only advantages I can think of are relatively small:
  • Keep people aware of taxes to feed anti-tax sentiment.
  • Sell more stuff with a lower visible price.
  • Lower apparent inflation.
None of these seem big enough to merit keeping us with the current system. Is this a situation where we have concentrated benefits and diffuse harms, so no one pushes to change it as strongly as the current beneficiaries push to keep it?

(Some example rules.)

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