Thursday, March 26, 2009

How to make a harmonized sales tax as painless as possible

When they harmonize the sales taxes, people are going to notice. Things that were previously taxed at 5% are suddenly going to be taxed at 13%, giving us a shock at the register.

Simple solution: change the rules so that taxes are included in the sticker price. When the sign says "Widgets, $9.99!" that price already includes tax, so we hand over a ten and get back a penny. How much are you paying in tax? Who knows? Who cares? You see the sign, decide if you're willing to pay $9.99, and if yes you pay $9.99. It will be like at the LCBO. Do we pay too much tax on our booze at the LCBO? Who knows? Who cares? The only question is whether we're willing to pay $12.95 for that bottle of wine.

Shopping will be easier because we can easily see how much we'll be spending. Cashiers' lives will be easier because they won't have to face customers with sales tax rage. (More than once when I was doing time behind the cash register I had a customer come in with a coupon for 99 cent coffee, hand me a loonie, and act like I'm trying to cheat them when I told them they owed me another 14 (or whatever it was back then) cents.) It will be easier to budget for big-ticket purchases. Apart from cases where the money simply isn't there, paying sales taxes won't hurt one bit.

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