Comment by linguae

Additionally, having baked-in taxes à la Japan would change how advertising works, since we don't have a uniform sales tax (unlike Japan). For example, I live in San Ramon, CA, which has a sales tax rate of 9.75%. If I drive just two miles north to Danville, the sales tax goes down to 8.75%. If I drive a few miles south to Dublin, the sales tax goes up to 10.25%. The reason is because California has a base statewide sales tax of 7.25% (with 1% of it going to local governments), and city and county governments are free to add up to 4% for local sales taxes.

By comparison, in Japan the consumption tax is 10% for most items (8% for groceries and takeout), and it's the same nationwide.

In addition, there are sometimes fees that are prohibited by law from being baked in. For example, California has a statewide ban on free "single-use" bags in grocery stores and some other businesses. These businesses are required to charge their customers for bags, and they are not allowed to bake it into the price. Some municipalities have extended this to disposable cups as part of an effort to discourage them in favor of reusable cups. For example, Santa Cruz mandates a 25 cent fee on disposable cups. The Costco $1.50 hot dog + drink combo is normally $1.50 + sales tax, but in Santa Cruz it's $1.50 + $.25 mandatory cup fee + sales tax (yes, the cup is taxable). I have yet to see someone bring a disposable cup to Costco or to other places where paper cups are sold, however.

Having baked-in taxes will require big changes about how taxes and fees work in America, the land of extra sales taxes, extra fees, surcharges, and tipping.