I was looking at a grocery receipt, and there are three different tax rates depending on the items. The receipt doesn’t even specify which items are taxed at which rate - just the total at each percentage.
I understand the goal of lower or higher taxes on groceries is to incentivize purchasing healthier options over more processed foods, but does it really affect purchasing decisions when the final price of the items is opaque to the consumer?
Good argument for the price inclusive of tax to be the price shown.
I think it’s fairly uncommon for sales taxes in the US to be intended to incentivize behavior - moreso, they are for funding local government and higher taxes are placed on things that are politically palatable in local elections - hotel rooms or restaurant/alcohol sales come to mind.
So I just don’t think we’re well practiced at mechanisms that make them work as a point-of-sale incentive, and changing the way a single class of items are priced would be complicated and surely receive pushback from retailers and the industry involved.
My belief that it’s intended to incentivize behavior is from talks about things like the “soda tax,” where some goods are taxed at a different rate to try to reduce consumption
I don’t understand how they can be effective when you don’t see the price on the sticker, though
Yeah, I agree the tax needs to be visible in the price to be effective