The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices
The Federal Trade Commission proposes a ban on junk fees and says hidden charges push up prices
The Federal Trade Commission has proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills.
The Federal Trade Commission on Wednesday proposed a rule to ban any hidden and bogus junk fees, which can mask the total cost of concert tickets, hotel rooms and utility bills.
President Joe Biden has made the removal of these fees a priority of his administration. The Democrat’s effort has led to a legislative push and a spate of initiatives aimed at helping consumers. Administration officials have said these additional costs can inflate prices and waste people’s time.
“The proposed rule would prohibit corporations from running up the bills with hidden and bogus fees, requiring honest pricing and spurring firms to compete on honesty rather than deception,” FTC Chair Lina Kahn said on a call with reporters. “Violators will be subject to civil penalties and be required to pay back Americans that they tricked.”
The FTC proposal is being coupled with the Consumer Financial Protection Bureau announcing that it will block large banks from charging junk fees to provide basic customer services.
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While we’re at it, can we get them to make stores include tax in the price listed as well? I’m happy to pay tax because we benefit from it but having tacked on at the end seems like a hidden fee to me.
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Stores change posted prices without tax more often than the taxes change, and they can handle the taxes in their point of sales, so they can easily include the taxes in the posted price by using the point of sale price.
Apologists: "it would be too hard for stores to post the prices!"
Meanwhile, stores be like:
(In case it's not obvious, that's an electronic price tag.)
It's irrelevant anyway, the price tags w/ tax included would still not really provide an accurate price since sales tax is calculated at checkout for the total sale, not each item/service. The way the system is now is just fine.
They don't have to calculate at checkout, and even if companies were forced to it would be within a few cents. Still better than needing to estimate ahead of time to know if you have enough tmfor tax.
I live in the US and several businesses have tax included in their listed prices. It really is not that hard.
But what I'm saying, is that sales tax is not per item when doing a sale. Sales tax is the total of the sale, thus why it's called sales tax. Putting the tax on every price label is redundant unless you're only ever purchasing one item.
Bars frequently sell drinks at a price that includes tax, and people frequently purchase more than one.
Most concession stands sell food with tax included in the price per item.
It is called sales tax because it is from items being sold, not whether they are sold together or individually.
I think you misunderstood what I meant: When you go to the grocery store and buy a bunch of items, the sales tax calculated at the end is from the total cost of the sale, each item is not taxed individually. The same is true if you buy one item, the total cost is how the tax is figured, the total cost just happens to be from one item.
When you have a tab at a bar you pay for multiple at the same time when you close out the tab. Same thing.
There's also intermittent tax holidays for various classes of items (school supplies in the late summer, certain foods, infant supplies), which can apply at the municipality, county, or state level - or any combination of the three.
With regard to retail stores, especially ones that sell groceries and sundries, the tax landscape is just too complicated and ever-changing for stores to be retagging shelves all the time.
Posting prices on store shelves isn't a big deal. We do it every week.
And presumably. Taxes don't change very often, so including tax into the price wouldn't be hard to do.
Right, but people are also forgetting that sales taxes are also calculated for the total sale, not individual items. So really, the whole thing is pretty pointless unless you're only buying a single item.
I think youre fundamentally misunderstanding how math works…
Sales tax is percentage based… purchasing 1 item at $10 pays the exact same amount of sales tax as purchasing 2 items at $5 or 10 items at $1 regardless of if the tax is applied “per item” or “total sale”.
I’m doubtful of your argument that it would be difficult. Store’s add inflation prices or have sales and other various promotions or where the price changes and they seem to be able to roll with those changes pretty easily. Granted, those are set by the store so they get to decide. But, if they know the price is increasing 0.05% at the beginning of the year, they have time to plan and figure out the price change.
You say it’s fairly easy to just add 10%, I think it is when you’re buying one or two items but I think most walk around the grocery store thinking “I have to add 10% to the milk, I have to add 10% to the lettuce, I have to add 10% to the bread, I have to add 10% to the salsa, 10% to the chips”.
Regardless how sales tax is charged, the items can be priced to cover tax and sold at that price, tax included. Other parts of the world already do this, and it is the business that reports the numbers to the gummint and pays their tax bill. Profit margins can be optimised to fix the little sway in the sub-cent variance of percentages, and only a real penny pincher would care. You sell this much, you pay this much, every month. It's how it works in the end.
And businesses already re-print/price their items frequently, sometimes on every purchase order received, which can be several times a week, because prices go up.