The Simple Life: All Taxes Included

February 8, 2012

On Saturday, I spent the day with an old friend. Getting together doesn’t happen as often as we’d like it to, considering that we only live 15 minutes apart. So, when we do make plans, we tend to go all out. This time, what was supposed to be a simple lunch date turned into a mini road trip.

After driving the 110 km it takes to get to Nanaimo, we stopped at Woodgrove Centre and perused through Bath & Body Works. From there, we searched for a pub to watch the rest of the Canucks game at. After eating and watching the boys comeback at the end and win in a shootout, we asked for our cheques. Because I bought her breakfast that morning, she offered to buy my salad, so all I had to pay for was my drink. My total: $7.00 even.

But… that’s what the price was on the menu. Does that include the taxes? Yes! And, while I didn’t bore my friend with it, that simple total really got me thinking… Can you imagine if every price tag included the taxes? If your morning coffee at Starbucks, dinner at a restaurant or clothing from a store, told you what the full price was going to be upfront? Do you think it would change your spending habits?

Personally, I think it would save me every time. Think about it: how many times do you say that something is only $15 when it was really $15.95 + tax? Or $20 when it was really $22.38 after tax? Probably every time. If you only have $110 to spend each week, like I do, imagine how fast those few extra dollars add up. But if you saw that your Starbucks order was going to cost $5.32, or that lunch was going to be $11.20, would you change my mind about making the purchase?

Other than this experience at Longwood Brewpub in Nanaimo, I’ve only come across one other business that does this: Noodle Box. There, you know that when you order a box for pickup, it’s going to cost exactly what the menu said it would. And I love that. If I know I only have $10 on me, I’ll stick with a Chili Plum box. However, if I have a few extra dollars to spare, I’m ordering the Singapore Cashew Curry.

Sure, at anywhere else, you could whip out a calculator to find out what something is really going to cost you, but it could get to a point where you look and feel like a crazy person. Either way, I’m curious to know what you think…

At the end of each month, do the hidden numbers kill your budget? Or do the unknown taxes stop you from buying things you’re not sure you can afford?

  • Taylor February 8, 2012 at 7:20 am

    oh my goodness, the hidden numbers kill me every time. Especially after moving from Alberta (5% tax) to Ontario (13%).

  • Melissa February 8, 2012 at 7:24 am

    Honestly, I’m so used to calculating tax (and I can do it in my head), that I don’t think it would change my spending habits. When I see a $10 price tag, my head automatically reads $11.30. It’s actually always a pleasant surprise when I’m at the book store and the total ends up being less than I thought, because I can never remember that books are still taxed only at the 5% GST rate, and not the 13% HST rate.

    But then again, I know a lot of people who definitely see $10 and think $10. Or, worse, see $9.99 and think $9! I guess it just depends on your shopping habits. Other countries often include the tax in prices.

  • kimberleymosher February 8, 2012 at 7:44 am

    One of the reasons I loved living in Britain was that the taxes were included in all the prices! It was amazing! I really hate seeing what the provincial tax rates add to my bills – be it clothing, a night out or groceries. What really gets me is a larger purchase, especially an online one, where I’m subject to my home tax rate. UGH. I think it would be much easier to budget if all taxes were included. Great post!

    • Cait February 8, 2012 at 9:37 pm

      Maybe I should just move to a country like Britain then… no, wait. Things are even more expensive over there!

  • SP February 8, 2012 at 8:00 am

    This would be great – taxes are over 9% here, which is… a lot. On our vacation this summer we were tlaking to some europeans who were surprised and shocked when we said our prices never included taxes. I think it is because we (america at least) has a complicated system and I could drive 10 miles and pay a slightly different tax rate because I’m technically in a different city.

    • Cait February 8, 2012 at 9:38 pm

      Seriously!? All the provinces in Canada have different tax rates but not different cities. I’d love to go do some shopping in Alberta… 5% compared to BC’s 12!

  • Michelle February 8, 2012 at 8:38 am

    Ugh I think I would definitely spend differently. Tax where I live is around 9.75%, so if I buy anything, that’s a big chunk.

  • A+J February 8, 2012 at 9:50 am

    I’m super lucky. I live in Oregon and we don’t have sales tax! I love it! But I’ve gotten spoiled. Whenever I travel outside of Oregon I am always shocked when my total isn’t what the price tag says it will be. I bought a shirt at Zara in San Francisco last December and was really surprised when my expected tag of $59.90 was more like $65. And I pointed out to a cashier in New York that the price on something was only supposed to be $10. She looked at me like I was an idiot and said “tax.” Oops. (Apparently our income tax is a lot higher than normal, though, so the state makes up for it.)

    I didn’t grow up in Oregon, so I had sales tax to deal with until about 5 years ago…how quickly I forgot about it!

    • Cait February 8, 2012 at 9:39 pm

      So what you’re saying is that I need to come visit and do my shopping down there? ;)

      • A+J February 9, 2012 at 9:32 am

        Yes! You’ll even have a free place to stay! :]

        PS – that means I expect reciprocity. I loooooooove Victoria! haha

  • See Debt Run (@seedebtrun) February 8, 2012 at 10:46 am

    i would much prefer the whole numbers system, myself…
    it would make everything easier, from budgeting to tracking expenses.

    this is probably going to sound nerdy, but i’m going with it anyways..

    today- when i go to the grocery store, i may purchase a $10 pack of paper towels and a $20 box of diapers to go with $60 of food groceries..

    when i am recording the trip at later, i put $10 in the home supplies category, $20 in the baby supplies, and the rest in food. But the food budget is carrying the tax weight of the other items.. which isnt quite right.

  • Cassie February 8, 2012 at 11:38 am

    I’m in a similar boat as Kimberleymosher; when I lived in Denmark the taxes were included in the price of the clothing. What you see is what you pay (Kind of, their money system has a rounding quirk). The hidden numbers don’t kill my budget, I usually account for them, but they do frustrate me.

  • kimberleymosher February 8, 2012 at 12:02 pm

    Yeah, and maybe this is a topic for another post, but what’s up with pennies!? Every few years you hear about the cost to produce the pennies, and they are annoying in the purse. When it comes to price points, it’d be great it everything rounded to .50 or .05 or something like that. I think that would work even better with the whole incorporated tax idea! Thanks @cassie for making me think of that – I think Denmark might subscribe to something like that?

    • Cassie February 9, 2012 at 4:07 am

      Yes, they do. The frustrating part is that not everything is priced in the intervals they have coins for. They basically go down to quarters, but still price to the penny. So if you buy a few items that come to $5.01, you’re now spending $5.25.

  • eemusings February 8, 2012 at 12:14 pm

    I thought this was just a US thing. Do you not include taxes on price tags in Canada either? I just can’t understand this – I think it’s ridiculous. There is no reason for it.

    • Cait February 10, 2012 at 9:02 am

      So, the entire world – minus North America – already does what I’m proposing? Clearly I need to move.

  • afistfulodollars February 8, 2012 at 4:17 pm

    I think if I still lived in BC, I would love it if taxes were included because the HST makes it cost significantly more. However, I’m in AB, so 5% really isn’t all that much to me and doesn’t make a huge difference in the price.

    Thanks for clarifying the twin thing, I was so curious!

    • Cait February 10, 2012 at 9:03 am

      I’m so jealous of Albertans for that reason. If I lived close to the border, I’d be shopping in your malls. ;)

  • Simple Rich Living February 8, 2012 at 6:33 pm

    I’ll vote to have taxes included in the price tag any day. I think I would spend less.

  • Cassie February 9, 2012 at 4:07 am

    I tagged you in a recent post Cait:

    • Cait February 10, 2012 at 9:04 am

      Thanks! If I have time this weekend, I’ll do this back to others. Love some of the questions!

  • Anya February 9, 2012 at 5:06 am

    I’m an accountant so I always figure in sales tax when I consider my purchases. I’ve lived in the same state since I was 8 years old so I’ve never had to adjust to not paying sales tax or paying a different tax rate. Where I live, it’s pretty easy. Our tax rate is 8.25% on most items so I just add 10% to everything.

    • Cait February 10, 2012 at 9:05 am

      Calculating more tax than you’ll actually be paying… I like that. Very smart!

  • Vanessa Pagé February 9, 2012 at 6:19 am

    When I was a kid and the tax was a flat 15% (provincial and federal combined) I had all the “final prices” memorized… Now that the feds have lowered their rate and the province has raised their’s I’m all confused :P

    When I went to Europe, I found that the “tax included” thing made me spend more. Whenever I was debating about a purchase (a particular book comes to mind) I would think… “Hmmmm, 12£… Can I get that cheaper in Canada? Hmmmm…” Then I’d remember that the tax is included and that the price is really only 10£ and it would seem like such a bargain that I *had* to buy it. Horrible.

    I really do hope that Canada adopts this one day though since, once we’d get used to it, it would simplify matters significantly (we’d be able to budget more easily, add up our purchases accurately in store etc)

    • Cait February 10, 2012 at 9:08 am

      I wonder, though, if adding tax to the price tags would end up making us pay more. For example, if something was going to cost $5.32 with tax, would they round it up to $5.35, $5.40 or $5.50? So the initial item price would go up slightly? Hmm…

  • The Happy Homeowner February 9, 2012 at 11:09 am

    I try my best to anticipate taxes when purchasing things, but I’m not always perfect about doing so. However, I’m religious about tracking my spending to the penny, so I always know how much I have left to spend throughout the month (I tally everything at least weekly). It makes a huge difference when you re-train yourself to think/behave this way!

  • Cait February 10, 2012 at 9:03 am

    Love YOU, twin!

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  • lintulainen February 25, 2012 at 7:55 am

    Move to Finland! People woud get totally upset if the taxes suddenly would not be calculated upfront – everybody knows one litre of milk costs around 0,9€ and that’s after tax. Every single price marking in this country has to include tax. Which, by the way, is 13 % for food stuff and 23 % for pretty much everything else :)

  • Karl January 18, 2013 at 2:15 am

    Tax excluded pricing is about governments and corporate greed. Consumer should be the honestly informed about price. And for the final price of a product or service you need a calculator. It took about twenty years to force airlines to adopt tax included pricing and we are finally happy. And our governments behave the same way as were airlines companies before. Because you do not see final price on the shelf they can increase any form of taxes without being noticed and opposed sellers and service providers. We think we live in democracy but we ordinary people are absolutely invisible to our governments.

  • Clare December 16, 2013 at 11:15 am

    Just came across this post. Interesting, in my country (Uganda, East Africa) tax is included in everything. Makes life so much harder when I travel to countries that exclude tax :-)