No more new pennies

[hbelkins]

All the above are good reasons why sales taxes should be eliminated.

I deviate from my conservative-minded brothers and sisters in that I'd much rather pay a flat income tax than a sales tax.

[kphoger]

All the above are good reasons why sales taxes should be eliminated.

I deviate from my conservative-minded brothers and sisters in that I'd much rather pay a flat income tax than a sales tax.

I'd rather there be a flat income tax too, but also that sales tax were simply included in the shelf price.  I really don't have any reason to know what the pre-tax price of an item in the store is, because that's not how much money I need to pay for it.  None of these has been a good reason to eliminate sales tax—just that the pre-tax shelf price doesn't matter.

[kalvado]

All the above are good reasons why sales taxes should be eliminated.

I deviate from my conservative-minded brothers and sisters in that I'd much rather pay a flat income tax than a sales tax.

I'd rather there be a flat income tax too, but also that sales tax were simply included in the shelf price.  I really don't have any reason to know what the pre-tax price of an item in the store is, because that's not how much money I need to pay for it.  None of these has been a good reason to eliminate sales tax—just that the pre-tax shelf price doesn't matter.

There are good reasons taxes are collected in multiple ways, such as sales, income, property..
But including tax into sticker price should be a no brainer. Same as basic server pay included into restaurant prices..

[kphoger]

Same as basic server pay included into restaurant prices..

I'd feel a lot better about tipping if only...

(1) it weren't practically mandatory, but rather only for exceptionally good service; and

(2) the amount weren't a percentage of the total bill, but rather a fixed amount such as $5 or $10.

Speaking of which, Carrie and I always tip at a restaurant such that the total amount comes to an even dollar amount.  So, if the bill is $53.77, and we want to leave an 18% tip, we'll round that $9.68 up to $10.23 instead.  Sure, it's 1% more than we wanted to leave, but whatever.

[kphoger]

So, can banks no longer order pennies?  I think this may be true.  If that's the case, then, as soon as any given bank runs out of pennies from the vault, they're left with only what customer turn in.  And, if that's the case, then stores can no longer order pennies from the bank either.

[kkt]

As for other types of stores, clothing is not taxable in Massachusetts, but I don't think it's that widespread elsewhere in the United States.

I thought this was only up to $175.00 (source):

Tax-Exempt Items & Sales

The following categories of sales or types of transactions are generally exempted from the sales/use tax:

Food & clothing

Sales of food for human consumption (other than meals sold by a restaurant) and clothing costing $175 or less. For items that cost more than $175, sales tax is only due on the amount over $175 per item.

Wow.  I bet Massachussets sellers of clothing and other goods LOVE having to order custom programming on registers to calculate sales tax on the part of a single item that's over $175.

[Scott5114]

I really don't have any reason to know what the pre-tax price of an item in the store is, because that's not how much money I need to pay for it.

But including tax into sticker price should be a no brainer.

The problem on the seller's end is that every city and county in the US is free to set its own tax rate (and even sometimes parts of cities will have special taxing districts). In a grocery context, in some states an item is taxable, and in others it's not.

While computerized price tags make this somewhat more reasonable to accommodate, it does mean that a chain store can't leverage economy of scale when printing advertising including prices (e.g. "Spam, $3.68/can") unless the taxes are calculated at the time of sale. Otherwise, each store would have to have its own advertising printed up, which may not be doable (e.g. newspaper advertising; I don't think the Oklahoman allows advertisers to specify different ad inserts for papers delivered to Oklahoma City vs. those delivered to Norman vs. those delivered to Newcastle, all of which have different tax rates).

In online shopping, you have the problem that you have to display a price to people to get them to put the product in the cart, but you do not know what the sales tax is going to be until the customer enters their shipping address. And customers generally refuse to enter their shipping address if they haven't already decided to buy the product.

If you ever look at countries which mandate that advertised prices include tax, they are all unitary countries which have a uniform nationwide tax structure. The US would have to restructure its tax system to be more uniform to allow this to happen here. (I guess you could do something like "allow advertising to say price plus tax but require posted prices in the store to include tax" but that seems like a recipe for causing the brainless sludges they call "customers" to get in a fight with clerks claiming that's "false advertising".)

[kphoger]

it does mean that a chain store can't leverage economy of scale when printing advertising including prices

Good.  I hate advertising.  Maybe they'd do less of it.

I guess you could do something like "allow advertising to say price plus tax but require posted prices in the store to include tax" but that seems like a recipe for causing the brainless sludges they call "customers" to get in a fight with clerks claiming that's "false advertising".

[GaryV]

Yet tax rounds off. That appears to be a 9% tax rate. Buy 10 of those things, and you don't owe $40.20. You owe $40.11.

[kphoger]

Yet tax rounds off. That appears to be a 9% tax rate. Buy 10 of those things, and you don't owe $40.20. You owe $40.11.

Good point.  (Well, the math doesn't actually work out with 9%, but see below.)

If sales tax is 9.35%, then...

3.68 = base unit price
0.34 = sales tax
4.02 = shelf price

...and...

36.80 = expected base unit price for 10 items
3.40 = expected sales tax for 10 items
3.44 = actual sales tax for 10 items
40.20 = expected due at register
40.24 = actual due at register

...but, if sales tax is 9.15%, then...

3.68 = base unit price
0.34 = sales tax
4.02 = shelf price

...and...

36.80 = expected base unit price for 10 items
3.40 = expected sales tax for 10 items
3.37 = actual sales tax for 10 items
40.20 = expected due at register
40.17 = actual due at register

[ClassicHasClass]

If you ever look at countries which mandate that advertised prices include tax, they are all unitary countries which have a uniform nationwide tax structure.

Not quite - Australia is a federation, but it does have an interstate agreement on GST introduced in 2000 where the rate is uniform nationally. My wife never fails to point out when tax is added on States-side.

[formulanone]

Speaking of which, Carrie and I always tip at a restaurant such that the total amount comes to an even dollar amount.  So, if the bill is $53.77, and we want to leave an 18% tip, we'll round that $9.68 up to $10.23 instead.  Sure, it's 1% more than we wanted to leave, but whatever.

It depends on the quality of service and my mood. If it says "20% = $5.02", then I'm probably leaving $5. Unless it either rounds off the bill to an even amount (easier to find when checking credit card statements), or something silly like $34.56 or $86.42 just because I can, so as long as nobody's getting shafted. While I'll tip based on the Price + Sales Tax, I don't consider any added fees into the gratuity, unless it's some piddling amount.

Of course, what really throws off those statements is when the charge amount ignores the tip, so at that point I figure someone either messed up or somehow reimbursed them in cash for whatever backstage reason.

All the above are good reasons why sales taxes should be eliminated.

I deviate from my conservative-minded brothers and sisters in that I'd much rather pay a flat income tax than a sales tax.

I'd rather there be a flat income tax too, but also that sales tax were simply included in the shelf price.

I guess it depends on the state, county, municipality, et cetera; many places do not seem to denote whether an item is taxable or not in a grocery store. Sure, states like Alabama tax nearly everything in a grocery store (prescription medicine is an exception). But in Florida it varies; usually if there's sugar or carbonation in it, or some sort of prepared food, that's a good sign it's taxable. But there's a few edge cases here and there. And Georgia has two rates depending on the item and location (note: it's a PDF).

Ironically, a lot more northeastern states don't bother with sales taxes on most food and clothing. But I'd figure things like home/land and other yearly state taxes are greater overall.

[vtk]

Let's say an online retailer begins a "price includes tax" policy. The problem of not knowing the tax rate before the customer checks out can be solved by adjusting the pre-tax price according to the applicable tax rate when such becomes known. That would be a form of price discrimination, yes, but is someone in a 3% sales tax location really going to care that they effectively pay the same $40.00 for llama wax as another customer in a 9% sales tax location does?

[ClassicHasClass]

Let's say an online retailer begins a "price includes tax" policy. The problem of not knowing the tax rate before the customer checks out can be solved by adjusting the pre-tax price according to the applicable tax rate when such becomes known. That would be a form of price discrimination, yes, but is someone in a 3% sales tax location really going to care that they effectively pay the same $40.00 for llama wax as another customer in a 9% sales tax location does?

This is America. Somebody will sue.

[vtk]

It hasn't stopped the airlines from changing the prices they offer based on your browser history

[MikeTheActuary]

Let's say an online retailer begins a "price includes tax" policy.

I'd think that an online retailer wouldn't have an incentive to adopt such a policy (unless, perhaps, displayed prices were dynamic based on shipping address and the buyer's tax status), as the online retailer is presumably dealing electronic financial transactions (where rounding isn't required), rather than cash-sans-pennies.

Although, one must also consider the IRS, which requires all amounts entered electronically to be rounded to the nearest whole dollar.

[GaryV]

Although, one must also consider the IRS, which requires all amounts entered electronically to be rounded to the nearest whole dollar.

The IRS doesn't collect too many sales taxes.

Is there a requirement for businesses to collect taxes from buyers? They have to pay the tax for their sales. I know this happens a lot for small owner businesses, such as farm markets. You pay $8.00 for your apples; the farmer pays the tax out of the proceeds.

[mgk920]

The Walmart*s here in the Appleton, WI area are now rounding the bottom lines on their receipts (cash transactions) down to the nearest 5¢.

Mike

[Scott5114]

Las Vegas is now in this weird in-between state where half of the stores are rounding and some are still handing out pennies. So I'm still getting pennies, just more slowly than before.

Since I still have plenty of pennies on hand, this tempts me to leave the house with a few pennies in my pocket so I can use them when I would be rounded down and not use them when I would be rounded up. The main reason I don't is because that's more math to get, what, 2-3¢ worth? of profit than I really care to do.

[kphoger]

Las Vegas is now in this weird in-between state where half of the stores are rounding and some are still handing out pennies.

Don't you suppose that such an in-between state will actually last quite a while?

[kalvado]

The main reason I don't is because that's more math to get, what, 2-3¢ worth? of profit than I really care to do.

That's exactly why penny is not needed.

[mgk920]

Las Vegas is now in this weird in-between state where half of the stores are rounding and some are still handing out pennies. So I'm still getting pennies, just more slowly than before.

Since I still have plenty of pennies on hand, this tempts me to leave the house with a few pennies in my pocket so I can use them when I would be rounded down and not use them when I would be rounded up. The main reason I don't is because that's more math to get, what, 2-3¢ worth? of profit than I really care to do.

I simply deposit any 'Zincolns' that I get.  OTOH, I hang on the any bronzies since their metal value is now between 3 and 4 times 'face'.

Mike

[Scott5114]

I do too, but neither of my banks here in Nevada have a coin machine, so I can only do that in multiples of 50 (and functionally 100 because the bank that accepts coin deposits is my business account and I sort of hate it when the equity line on my balance sheet isn't a round dollar amount).

I guess if I knew I had a trip to Oklahoma coming up, I still have a bank account open there, so I could lug a jar of coins out there and dump them in the coin machine, but that would be kind of silly.

[kphoger]

The main reason I don't is because that's more math to get, what, 2-3¢ worth? of profit than I really care to do.

That's exactly why penny is not needed.

When it's not worth your time to literally receive the money that's due to you, then there's a problem with the money.

[mgk920]

I do too, but neither of my banks here in Nevada have a coin machine, so I can only do that in multiples of 50 (and functionally 100 because the bank that accepts coin deposits is my business account and I sort of hate it when the equity line on my balance sheet isn't a round dollar amount).

I guess if I knew I had a trip to Oklahoma coming up, I still have a bank account open there, so I could lug a jar of coins out there and dump them in the coin machine, but that would be kind of silly.

As I have said in here before, my bank here in Appleton gives full 'face' on any coin deposits and wants them loose.

Mike