There needs to be regulation here, and not just on cable. If you're going to charge it to me, you shouldn't be able to wait until checkout (or even worse, the first month's bill) to tell me what the price actually is.
Comparison is the mechanism by which competition drives a healthy economy. There's less value in competition the harder comparing them is. It's really hard to compare when you have to dig all the way to checkout to find what you'd pay.
Imagine you're at the supermarket and different brands of milk were listed at one price, but each had different fees when you get to the cash register. No one but the cashier can tell you what each option actually costs. How many people are going to get out of the line and go back and try another brand of mystery milk when they find out they chose one with a $1 "cattle fee?" It makes competition weak and needs to be illegal.
It's not regulation that's needed but competition. A good start would be to separate the infrastructure from the data delivery portion of the service like is done for Electricity and Gas. Introducing competition for the delivery portion will drive down rates.
* You have to login and tell you who you are before they'll even deign to tell you which services are available to you and at what cost.
* They WILL NOT tell you what the actual cost of a package is. They'll only tell you the 'sticker' price during the promo period. It's virtually impossible to find out the price after the promo expires.
* They WILL NOT show you the price on their website until you tell them where you live, and the price (and services available!!) change depending on whether you're a current customer, previous customer, etc.
Basically, there is not a 'menu' or price schedule. There's absolutely no way to know. Even if you call in, it's basically a negotiation. It's like the worst of used car dealerships "what do you want your monthly payment to be" dealing.
I paid for Comcast television service for years, when I wasn't even using it -- I just used my over-the-air antenna. Why? Because they charge you less money for the same internet service if you also agree to 'accept' a TV package to artificially inflate their subscriber numbers. I think that discount goes away when your promo expires, which is part of what they're banking on -- even if you're paying them "only" $20 a month more for TV on top of your internet, at least it's something. And then, of course, they get to charge you all these bogus TV fees. The more services you agree to, the more they can hit you for fees.
Thankfully, AT&T and Sonic are moving in with gigabit offerings. I finally got symmetric FTTH in April from ATT, resold by Sonic, and Sonic is hoping to roll fiber by the end of the year so I can pay them directly, $50/mo instead of $90 for ATT.
It's still an incredibly complicated, and I'm not sure how much of it will go away when I'm getting Sonic-provided service instead of resold ATT (maybe ATT itemizes more fees?), but at least all of the fees/taxes are, I believe, legitimate. I do have to pay modem+ATA rental fees regardless of which provider I use, but I'm happy to do so because it's still better and cheaper than any service I've ever gotten (1 gig down is $150 from comcast, with like 25mbit up, all capped at 1TB xfer, where my FTTH is unmetered symmetric gigabit)
Description Unit Price Total
Voice Federal Universal Service Fund Fee - 0.73 0.73
STI-0324805-1/PAIR41431
Voice California Lifeline Telephone Service 0.39 0.39
Surcharge - STI-0324805-1/PAIR41431
Voice California Deaf and Disabled Telecom 0.04 0.04
Program Surcharge -
STI-0324805-1/PAIR41431
Voice California High Cost Fund-A Surcharge 0.03 0.03
- STI-0324805-1/PAIR41431
Voice California Teleconnect Fund Surcharge 0.06 0.06
- STI-0324805-1/PAIR41431
Voice California Advanced Services Fund 0.05 0.05
Surcharge - STI-0324805-1/PAIR41431
Voice California 911 Emergency Surcharge - 0.06 0.06
STI-0324805-1/PAIR41431
Voice Redwood City Utility Users Tax - 0.49 0.49
STI-0324805-1/PAIR41431
Voice California Public Utility Commission 0.03 0.03
User Fee - STI-0324805-1/PAIR41431
Voice FCC Interstate Telecom Service 0.01 0.01
Provider Fee - STI-0324805-1/PAIR41431
Property Tax Allotment Surcharge - 0.36 0.36
STI-0324805-1/PAIR41431
Voice Regulatory Recovery Surcharge - 0.77 0.77
STI-0324805-1/PAIR41431
Fusion IP Broadband Phone Service - 0.00 0.00
6507164737 - STI-0324805-1/PAIR41431
Fusion IP Broadband Residential FX3, 90.00 90.00
STI-0324805-1 - SIID 1398754-1
$10 Fusion FTTN Discount for 12 months - 10.00cr 10.00cr
1398754-1 (expires: 2020-04-25)
Fusion IP Broadband Information - 0.00 0.00
STI-0324805-1 - Data $80.00 Voice $10.00
Fusion IP Broadband Modem Rental - SIID 9.50 9.50
1398754-1, Device ID 276586
ATA Rental - STI-0324805-1, Order ID 275814 6.50 6.50
Fusion Fiber Pre-Order 0.00 0.00
The whole (US) cable provider industry needs to change. It is so anti-consumer. I was a Comcast customer for over 15 years. Once or twice a year I'd have to spend a couple hours talking to their customer service because they raised my rate, snuck some bogus charge on the bill, or signed me up for something I didn't want. They are borderline criminals.
My experience getting rid of the TV portion of the package was so painful, I cancelled everything instead and switched to AT&T. Luckily, they had recently laid fiber to my house. I was wary as they weren't the best company to deal with back when I had a landline. I figured they couldn't be worse than Comcast though. To my pleasant surprise, they've been perfect. 10/10. Their pricing was transparent and stable. The service top notch. No idea what customer service is like because I've never had to call.
I suspect it is only this good because there's competition here though. So YMMV. I'd love to see a heavy regulatory hand smack the whole industry.
Same. I have AT&T gig fiber after switching from Comcast. 3 Years in, no complaints. My 2yr old son ripped the fiber line out of the house, and they came the next day and fixed it in like an hour, no charge. Been very satisfied with AT&T.
I recently switched from a 1000/50 package with Suddenlink (would rarely get over 400, even wired) to 1000/1000 with AT&T Fiber. I now easily get 950/950 wired consistently. It's $73/mo. The bill has been easy to understand. AT&T really surprised me with everything.
We just dropped AT&T (directv) because of the bogus charges. We now only use streaming services. We are using Comcast for the internet and nothing else.
There is also the issue of billing "mistakes," which, wouldn't you know it, are ALWAYS to the benefit of the cable company. This has been the norm for years, yet nothing is done about what is clearly systematic fraud.
The other point, that the article fails to mention, is that oftentimes these providers have local monopolistic markets where the opportunity for consumers to choose a competitive provider are nonexistent.
That allows them to increase fees 600%. I would dump Comcast in a heartbeat if I had an alternative. Their service is unstable and inconsistent in my area and we are forced to pay very high rates.
For cable TV specifically, lack of competition is a harder case to make than for Internet given that al least most people with houses have the option to get satellite TV instead. (Or streaming TV services assuming they have broadband.)
Lack of competitive choices is the reason they get away with this. My choices are 1 cable provider, Dish, and DirecTV. Not much competition. I have tried cutting the cord and streaming TV, but it's not ready for prime time yet. I also tried DirecTV and they had their own set of junk fees. At this point, I just pay the fees and hope technology improves enough to have ubiquitous choices.
I'm finally dropping cable TV entirely because my TiVo with lifetime subscription finally died. But I basically don't watch it so it's not that hard a decision even if the alternatives aren't perfect.
I mean, not really, as it includes other services. It probably goes some thing like this
$65 for internet,
$60 for tv
$35 for phone.
$20 for rented devices (such as a DVR)
Phone services and the rented devices are increasingly unnecessary, but when I’ve looked into cutting the cord and maintaining the same level of media accessibility (live sports and certain kids programs mostly) my savings come almost entirely from dropping phone and devices, not TV.
I feel for you. The (near-)monopoly in some service areas is disgusting.
$150-220 for triple play (tv, internet, phone) is still preposterous. It is 2-4 times more expensive than the most expensive package I could find for my current location (Northwest Europe), including all extra pay-tv channels (live sports, etc).
$20 per month for a DVR is $240 per year, which is insane. $35 for landline is insane. Internet price you quote ($60) would get you almost commercial-grade internet here.
Don't get me started on the price of USA mobile phone networks!
This kind of thing makes me glad not to be an American consumer.
The article cites the example of CenturyLink's "Internet Cost Recovery Fee", which is a $4/mo fee not listed in your price that is supposed to cover CenturyLink's costs of network expansion. I don't know how you can argue this is not part of the rate which CenturyLink themselves are charging for the service. Some of the other examples, like Comcast's passing on of government fees outside of the headline price I could understand as political differences, the same way you do not include sales tax in advertised prices (which annoys me every time I'm in the US), but I don't see how the "Internet Cost Recovery Fee" is not actionable fraudulent advertising.
In comparison, my ISP's advertised price is €80/mo. I pay €80/mo. In exchange, I get 400mbit/s broadband with no extra fees. This is technically a business plan, but the only extra price weirdness for consumer plans is the 6 month introductory rate.
I live in Canada and we do the same thing here. I think it’s a good thing to remind everyone of sales taxes at checkout time. Sales taxes are regressive taxes. We should get rid of them in favour of a more progressive tax, such as land value tax.
Laws that mandate hiding sales tax by including it in the advertised price only serve to entrench a tax that should be repealed.
Edit: I just wanted to note that the vast majority of people I see defending sales taxes (i.e. VAT) are Europeans and the people opposed are North Americans. Putting aside the argument over whether it’s a good idea or not, I think this is good (albeit anecdotal) evidence that hiding/showing the tax in the purchase price at checkout affects people’s opinion of the tax.
In probably all European places I've seen, final consumer price is most prominently displayed (what I most care about). That doesn't mean VAT is hidden. It is clearly displayed, often in shop labels, but also required on receipts with each item (VAT rate, total), and a summary of individual VAT rates (rate, base, VAT).
People I know are well aware of the taxes here, both VAT, income taxes and mandatory health/benefits payments.
I think I would be quite annoyed if the taxes were omitted from the price until the cashier calculates it (or if I'm supposed to do mental gymnastics). Do you mentally calculate total price if the taxes are different? Or just apply a constant factor?
I for one either mentally multiply by 1.1 for an upper bound or don’t bother at all, mostly the latter, because (a) different items can be taxed differently; (b) different states (sometimes even different cities) have different tax rates.
For the record I hate it because I only care about the out-of-pocket costs. Same goes for tips.
If you would be annoyed, then VAT is hidden in the most important sense. It's like a mosquito that can bite without making you itchy so that you don't notice it. Yes, everyone may be aware that mosquitos exist but without the annoying reminder they can do a much better job spreading malaria to unwitting people.
VAT, being a sales tax, is a wealth transfer from the poor to the rich. The fact that you don't have to calculate it at checkout is a point against it, not in favour of it.
VAT is only regressive if you assume that everybody have a constant spending regardless of their income. In practice I think people with a higher income also spend more, however, probably not linear to their extra income.
In practice, sales tax is probably progressive, but not to the same extend as, eg. income tax.
Furthermore, we should probably consider increasing the sales tax as it limits the consumption. This is highly necessary given our current ecological situation (In Denmark, where i live, the sales tax is 25%).
Sales taxes are definitely regressive (as that word is used by policy makers) because low-income people spend closer to 100% of their income than high-income people. The definition of regressive is a tax that takes up a larger percentage of income for low-income than high income.
It should be noted that VATs can be implemented in a progressive manner. Give everyone (or anyone under a certain income) an exemption that covers VAT for necessities, exempt items like rent/utilities from it, etc.
Giving an exemption for necessities turns VAT into a Pigovian tax on luxuries. In effect, this is an attempt to modify the behaviour of the poor and so it can be construed as a form of social engineering which exempts the rich. Given that some people view poverty as a moral failing, I think this is a bad thing.
In reality, it doesn’t even work. Poor people spend money on luxuries in order to gain status which they need to attract a partner. Rich people don’t need to do to spend their money to gain status since they already have it by virtue of being rich.
Sure, although there are implementation issues because of the incentive for straw man purchasing. Are you aware of any jurisdictions where low-income purchasers are given additional exemptions?
I would think it would be easier to use transfer payments (like SNAP) to ensure that the exemption is not used for the benefit of non-low-income individuals.
Alternatively, you can have a prepaid or postpaid refundable VAT, where individuals can get their VAT refunded (up to a limit) based on income.
It's better to give some rebate. Say the poverty line for an individual is $12,000 and sales tax is 10%. If you want to exempt 1.5x poverty spending from the tax, it is better to give everyone an $1800 sales tax rebate than trying to write exemptions.
VAT specifically zero rates or reduces rate on many of the necessities. Which makes it far less regressive than an across the board sales tax. To name just a very few: Children's clothes, food, books, and public transport are all zero rated and in the UK at least there's a lower rate on utilities.
Many sales taxes also exempt necessities, like grocery items and clothes under certain cost ($100 per item). I was surprised that when I bought clothes at a not-inexpensive retailer in NYC recently there was no sales tax.
I'd be interested to hear your reasoning for why you think sales tax is so bad. Personally I see it as one of the more reasonable ways of taxing people, as for every product sold the government/society had a part in making the sale of the product possible.
It's regressive because poor people spend a greater proportion of their income (like, all of it) on retail purchases, so they pay the rate (13% currently) on all their income. Where middle and upper class people who sit on money, invest it, whatever pay a much lower effective rate.
But they won't. Spend it, I mean. At least not on things where VAT is relevant.
Most people, when money comes in, they spend it on things, so it immediately has to also pay VAT. If they're lucky, they may have some savings, but it's going to be on the order of 2-3 months' worth of income.
Rich people make orders of magnitude more money, and mostly need to spend the same order of magnitude to live as the rest of us. The money beyond that, they mostly don't spend on the same kinds of things. After all, what would you do with a million dollars' worth of soap?
There's no VAT on lobbying, on buying a house in the Caymans, on hiring six people to clean the mansion.
VAT, like all consumption taxes that aren't highly targeted, is hugely regressive.
> But they won't. Spend it, I mean. At least not on things where VAT is relevant.
If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..) then I don't see why spending money on VAT-exempt items makes VAT a bad tax.
If you spend it on labor, housing, there are taxes associated with that other than VAT. Lobbying and charities might be tax-deductible or exempt, that is another discussion.
I think your point is that regressive taxes are bad, is that a fair analysis? I don't agree with that.
> If we can agree that the VAT is levied because the government has added some value to each product sold (value added tax..
What value has the government added to consumer products I purchase in the store, particularly in the USA where tax rates vary from state to state, county to county, or even city to city? There is no national sales tax here, but consumer regulation is still a thing, and factors into the base price of goods.
I’m still genuinely interested in what value you see the government adding, but I think this might be why Americans and Europeans are disagreeing here.
Roads, sidewalks, bridges, public transport, education (+ buildings), public libraries, emergency services, hospitals, ( ... the list goes on) are all heavily subsidized by the government here. You could design taxes such that these are all funded by the users but it is much easier to have a VAT that funds them all (at least partially). It's not like you can point to a piece of plastic on your chair and say the government made it, but the whole chair ending up inside your house was made possible, partially, by the government. I think it's fair to pay a bit for that.
Roads, sidewalks, bridges, public transport, education
So why not levy taxes against the land value of those who own the property adjacent to those structures? They are the ones who see the most benefit when the value of their land increases, causing their wealth to increase dramatically. For example, the shop owner derives vastly more benefit from the sidewalk in front of his shop than do the pedestrians who occasionally walk by.
Sales tax is a toll that gets charged to everyone, equally, when the benefits of the spending are distributed unequally.
The government adds value to all our lives, not merely to our consumer goods.
So perhaps a more effective and fair means of paying for it is to recognize that those with higher incomes are the most financially able to support the cost, and develop a progressive income tax that ensures that the highest burdens are put on those with the greatest ability to bear them.
People with high income are more able to pay such a tax, if it’s structured progressively. People with real estate holdings benefit most from emergency services.
It's called that because the effect of the way the tax is implemented is to tax the _addition_ of value to the product by those being taxed on its way to a consumer.
Suppose I buy a vacuum cleaner from a big store nearby for $100 plus $25 VAT. I don't need to care about this, but presumably the big store bought it from a vacuum cleaner manufacturing company. Maybe they want $50. Two things could happen, the manufacturer could charge $62.50 (adding VAT) which the big store then needs to claim back because they only bought it to then sell it to me - or more likely - the two firms exchange details and both create paperwork showing that the vacuum cleaner cost $50 and no VAT was charged. We can see that either way only $12.50 of the VAT is attributable to the big store, the rest is in some sense someone else's fault, either the manufacturer or their suppliers in turn.
That assumes that rich people eventually spend all of their money. They don’t. They let their children inherit the accumulated wealth.
Poor people who spend all of their money every month pay more in sales taxes, as a percentage of their income, than rich people who invest and save most of their income.
But if the rich people and their kids never spend their money, than it might as well not exist, right? Once they spend it they pay the tax otherwise it's just a number that grows with investments and doesn't give them anything else.
Investments aren't just a number on your trading account, they're property. Rich people also invest in property through real estate investment trusts (REITs) which profit when people pay rent in those buildings. By not taxing rich people as effectively as we tax the poor (via sales taxes), we enable rich people to own more of the society we live in and levy rents on poor people.
Isn't it kind of a tautology that rich people own more of society? I mean they're rich, by definition they own more than most people. If they didn't they wouldn't be rich. And why can't poor people invest? Unless they are being banned from investing because they are poor shouldn't we be working to make the poor wealthier so they can invest instead of dragging down the rich?
On the chance it isn't: Because they are poor. You know, spending all their income on housing, food, clothing and getting to and from work. A simple car repair, or broken cooker could tip a poor family into crisis. There's nothing left in the pot for investing.
I know, my point was that since the reason they can't invest is because they don't have enough money why don't we work towards making it so that the poor have enough money to be able to invest instead of dragging down rich people to the level of the poor which is the impression I get from some of the comments here.
Absolutely not. If they don't spend it, they're almost certainly going to invest it, and most of the time (broadly speaking) they will get some amount of positive return on it. That's quite a long way from it "not existing".
I'm not arguing that there's anything wrong with incentivizing investment this way, or that there are not risks to such investments, but I do think it's worth pointing out that effectively this is a case of "being paid for being rich", and the richer one is the more one gets paid.
My point was that at some point the money needs to leave the investment cycle in order to mean anything at which point it will be subject to taxes on whatever is purchased. The only way to avoid ever paying the tax is to never spend your money and at that point it may as well not exist for the rich person. The rich person will have more money left over than the poor person but they still spend more in sales taxes or whatever the equivalent is for what they purchase.
I guess I just don't see the problem with rich people having more left over after paying the sales tax than poor people do.
Money doesn’t need to be spent in order to provide utility.
Example: I recently needed to switch both jobs and housing urgently. When I learned this, I had about £13,000 in liquid savings and $7,000 in almost-as-liquid savings. I didn’t end up needing to really touch more than £3,000 of those savings pots. So was my £10,000 of extra savings giving me any utility?
Absolutely yes. I was much less worried.
Contrast this with someone who has no savings and whose tire blows. How do they acquire $250 in order to be able to keep their job?
The difference is that the rich person doesn't have to work. Their income is just the return on their investments. Meanwhile the poor person has to work 16 hour days to achieve an equivalent lifestyle. Okay, so they're paying the same amount of taxes, but is this a just way to organize society? What opportunity does the wage slave have to decrease their workload?
It's fine to have haves and have-nots, but the burden of supporting society should be equally borne, financially by those with financial means and laboriously by those putting in the labor. Regressive taxes force those without capital to pay twice.
I guess I just don't see the problem with rich people having more left over after paying the sales tax than poor people do.
The problem is that they can spend it on capital which then lets them earn more and more wealth. Maybe you also disagree with the claim that inequality is itself a problem? That would put you in the minority in most places.
If not, then consider this: sales taxes, due to their regressive nature, increase inequality and funnel more wealth to the top. Taxes on unearned economic rents (such as land value taxes) are progressive, decreasing inequality and spreading wealth more evenly throughout society.
To a certain extent, this is true. And thus, the rich are (by their nature, not by intent) siphoning money out of the system, reducing the amount in circulation and preventing the rest of us from having any access to it, no matter how hard we work.
Wouldn't this only be true if money can't be created? Although you may not be able to get access to a certain person's wealth you can make your own wealth by say starting a business or working hard at your job (assuming that the markets are actually working properly)
You and I can create value, but we can't (legally) create money. The government does that. If the very wealthy are able to take money out of the system faster than the government puts it in, we end up with the pool of money the rest of us have access to shrinking.
And to be clear, when I say "access to," I don't mean that we should have the ability to just spend someone else's money. I mean that while they hold that money, and do not spend it, as far as the entire rest of the country/society/system is concerned, it does not exist. The effective pool of dollars is smaller.
But doesn't that just make the value of the dollars left higher? If there is more value being created but less dollars to pay for it worth the value of a dollar should go up until the out of circulation dollars come back.
Yes, without outside influence. That's called deflation, which many consider bad because it incentivizes saving over using money, slowing the economy. We would have seen that after the crash in 07/08, but the federal government stepped in to inject cash into the economy. Should we have done that? Sure, we saw during the Great Depression what happens when you don't. But the way we did it was obviously regressive: instead of forcing some of the existing money supply, the out-of-play portion we've been talking about, back into the economy via a wealth tax, we did a bunch of things that essentially routed "new" money through the major banks (so they wouldn't fail).
It is called opportunity. Poor people in America are not forced to remain poor. They can (and do) improve their lot in life, and take advantage of being not poor like the other not poor people.
I am not going to downvote you, but that's just not always correct.
Plenty of people have come from nothing to become billionaires. (Oprah!) But plenty of people are trapped in a situation and can't just remove themselves from those traps.
Not everyone can learn Python and make $65 per hour by next week. Let's have empathy for people who really want to do better but can't, and see if we as a society can help them.
I think it’s an ugly undercurrent lately where everybody has to be super exceptional/motivated/passionate/etc or they’re worthless and deserve to be discarded by society.
Every member of an animal population can’t be exceptional. Are we just doing eugenics rube-goldberg style?
Probably intentionally misunderstanding but bear with me:
Sales tax is bad because it is not on the sticker. Guess my and every europeans surprise when we realize that what we have to pay not the sum of the prices on the goods we buy, but that sum plus some more.
VAT is a whole lot more reasonable as the price on the sticker is the price you pay is the sum of the prices on the stickers ;-)
That said:
VAT seems kind of reasonable to me but I will be happy to hear why ut isn't.
It’s regressive because rich people pay a smaller total percentage of their income in VAT, compared to poor people. That’s the definition of a regressive tax. Progressive taxes flip that trend. A land value tax is progressive because rich people tend to own more land and thus end up paying more tax, percentage-wise, than poor people.
The progressive / regressive terminology takes it for granted that income is the right denominator to measure against, rather than consumption, which is not obvious in my opinion.
Are you implying that consumption is a bad thing and we should discourage it? That would put consumption taxes in the category of Pigovian taxes [1] in your eyes. If that is the case, and other sales tax supporters agree with you, then it's not obvious from this discussion.
In my experience, it's generally been the case that rich people are anti-consumption, at least on a personal level. Poor people often splurge on luxuries to relieve some of the pressure of grinding poverty. They buy things to signal status in order to attract a partner. A sales tax on luxuries like this is effectively a wealth transfer from the poor to the rich, not altogether dissimilar to government-run lotteries which fund scholarships.
Not really, landlord will pass costs through to renter. So the Land Value Tax isn't really paid the the land owner but by the tenant of the land, through the land owner, to the Gov.
And the Gov sees the rich land owner as the source, not the renter. And it makes the land-owmer seem like their taxes are high - when the burden is not theirs
> Not really, landlord will pass costs through to renter.
This argument, followed to its logical conclusion, would tell us to abandon all taxes, all monetary penalties short of total seizure, and any form of finance-based incentive on companies and landlords.
So, what would you propose instead?
Edit: ....Also, this ignores the fact that not all land owned by the wealthy is being rented. Indeed, there are landlords that deliberately keep units empty, in part to reduce supply and keep the price of the units they rent higher. Taxing them even when they're inactive would prevent this kind of perverse incentive and help (at least in some small way) to alleviate the housing shortages in some areas.
Land Value Tax is not the same thing as property tax. LVT is a tax on the unimproved value of the land. That means when the owner builds something on the land, it does not affect the tax. Instead, the tax increases when the value of the land increases due to external factors, such as a new light rail transit line is built.
This means that a wealthy person owning an empty lot in an expensive part of the city pays just as much tax as the condominium owner next door. This encourages the empty lot owner to build and collect some rents in order to offset the tax. This ultimately increases the supply of real estate and puts downward pressure on rent.
I have Comcast in 2 states and the bills are very simple they charge me X amount for both, the same rate I agreed to when the plan started, and 0 extra fees.
Here's where things get complicated. The city I used to live in charged AT&T a municipal telecom tax of $1.25 when I moved the fee went away and I've since changed to Comcast. If I look at my cellphone bill I see a $0.11 tax for the state, and $0.06 for the county.
Remember you can tax at the federal/state/county/city level in the US. I used to work at a restaurant in the city limits that had a small percentage tax on alcohol, if you walk across the street its no longer in the city limits thus no excise tax.
I don't envy the programmer who has to make all this happen.
Reminds me of the fees airlines charge. So you think you're paying $400 for that flight? It's $512. Because there are things like "fuel surcharges". The cost of fuel should be built into the price. It's core to what I am buying, not a tax and not an optional add-on.
Are you an American? In the US, airlines/travel agencies/literally everyone selling airline tickets has to disclose the final price on the initial search screen (rounded up). It's actually mildly difficult to get the airlines/agents to break the final price down into its components.
I've taken dozens of flights in the US and I've never been charged a surprise fee.
For what it’s worth, cable companies are the rare exception in American consumerism in that there is very little competition. I wouldn’t regard this as emblematic.
EDIT: I’d really like to know why folks are downvoting this.
There is very little competition because the cable companies worked with cities to limit competition by convincing cities that the only way they would build out a cable network is if the cable companies were given a monopoly. It’s ugly. Competition is critical.
Cable, airlines, internet, insurance, food, cellular service, social networks, medical supplies, mattresses, search engines, and many more industries have very little competition. It's absolutely emblematic.
Cable is by all accounts perfectly fine in areas with multiple providers and real competition. Airlines were for the rich in the 70’s. Now they’re flying buses. Unpleasant and cheap. Competition in airlines is so brutal that it’s uncertain whether the US airline industry as a whole has ever turned a profit or if on net it's just burned investor money. In social networks I remember Friendster, Bebo, Google+, MySpace and many others. Snapchat still exists. This is a contestable market and it’s absolutely contested. Search engines likewise. Bing and DuckDuckGo are perfectly serviceable for most purposes, if not academic search, and the switching costs are non-existent.
In industries with little relevant competition it’s either because the government gave one company a monopoly, the Comcast effect, or because they’re just crushingly better than the competition, Alcoa or Google. The dangers of monopoly are in oversold to a completely ludicrous degree compared to the historical record. Look at Standard Oil, the poster child for the trusts. It drove competitors out of business through expertise and economies of scale while increasing quality and decreasing prices. Then the government broke it up after it had started to lose market share anyway. Monopoly gets an insane amount of coverage in economics compared to how often it arises in the real world outside of government mandates[1].
It is a myth that natural monopoly theory was developed first by economists, and then used by legislators to "justify" franchise monopolies. The truth is that the monopolies were created decades before the theory was formalized by intervention-minded economists, who then used the theory as an ex post rationale for government intervention. At the time when the first government franchise monopolies were being granted, the large majority of economists understood that large-scale, capital intensive production did not lead to monopoly, but was an absolutely desirable aspect of the competitive process.
Parent poster said, "Very little competition" not "no competition". I'm not arguing these industries are monopolies, but they have very few players and very large conglomerates that own most of the market share -- often between 1-3 players.
Insurance, food, cell service, and mattresses all have a fair amount of competition and lower prices. Airlines and medical are heavily regulated industries and regulation drives industries toward monopolies, not away from them. Search engines and social networks are different animals--they're already "free" to use and there aren't more of them in Europe (or the rest of the world) than in the US, so to the extent that those industries are monopolized, it's not because of some American cultural or political artifact.
Because it's absolutely emblematic. Hidden fees riddle American life. "convenience fees" and "processing fees" for everything from movie and concert tickets to hotel rooms.
The US love hidden fees. After being charged an “Urban” and “Resort” fee that was not advertised I learned that there seems to be neither regulation nor interest in requiring a customer to be presented with the final price on advertisements. It’s bizarre.
Sadly, our government works for the corporations as much or more than the citizens. It takes constant vigilance and due diligence to stay on top of it as a consumer. Most people probably just don't notice, allowing the problem to continue.
The email price had a disclaimer about extra fees being charged on checkout. So that does not help. The resort fee i had to pay was for a gym in the hotel I did not use and probably could have negotiated, the urban fee was for the “SF urban experience” which I can only assume is non negotiable given the location of the hotel.
You can’t dispute partial fees either and no bank lets you dispute a charge that is on your bill as far as I’m aware.
The way a credit (or debit) card works in the US, is that the onus is on the merchant to prove the transaction was legitimate. This includes notifying you what the total price is and you accepting that.
No bank in my experience (as a merchant or customer) would stand behind undisclosed or unspecified charges.
I assumed you meant the email said “extra fees”, but did not specify how much. If the email didn’t explicitly state how much you will pay, or a formula to figure out how much, then I believe the banks would side with you.
Here in Europe I'm mostly aware of rental car companies doing those kinds of things (there's always some extra insurance to be paid on top of the higher price that was supposed to also include reasonable insurance.)
What stops McDonald's from doing the same? Advertising 99¢ burger and then charging 25% handling fee? Competition, I'd say. Seems that these abusive practices are evidence of a monopoly.
Switching to a different fast food chain is as easy as walking next door in most cases.
Switching cable providers is impossible for many (Comcast is my only choice), or may require hours lost from work while dealing with customer service, returning equipment, waiting for installers, etc.
Wendy’s, Carl Jrs, Burger King, local places that sell quality burgers.
Remember people only choose McDonalds because of the consistent quality, for whatever definition of “quality” you want to ascribe to them, and low cost.
> people only choose McDonalds because of the consistent quality
Indeed, this is the only reason I eat McDonald's when I do - it doesn't matter where in the world I am, I know exactly what I'm getting, and I can pay in USD cash (although change is returned in local currency)
I do not. However I’ve spoken to a franchise owner after visiting 7 countries where they accepted USD who explained why. Don’t take it as gospel, but try it yourself next time you travel and see what happens.
The hours lost are worth it in the long run though if a competitor is going to cut your bill by 20-25% per month. If there is a valid competitor that is (almost never in the US).
With 2 competitors, you essentially need to negotiate with a willingness to swich every year or 2 at the most. That ends up being a substantial amount of time.
Living in the Bay Area and knowing how far workers have to commute for that job - because they’ve been priced out of the area - is something I’m willing to pay to the extent that money is going to the workers.
The "living wage surcharge" doesn't count, it's a political gimmick from restaurateurs against minimum wage increases designed to stoke public outrage.
The biggest share in operating costs for a restaurant is rent. Now if we could see a "the-rent-is-too-high" surcharge, that might spark a movement against excessive prices for apartment rents in the Bay. Fat change this will happen.
It's pretty refreshing now that I live in the UK that I see full prices for anything I purchase. Even airline flights and other EU hotels bookings show full price throughout the transaction.
My current battle, though, is with Travelodge. I discovered the hard way their 'Flexible rate + Breakfast + Wifi' packagee refunds only the room and breakfast parts if you cancel. Despite the wording 'Cancel up until noon on arrival date', they withold the wifi charge if you cancel.
This isn't mentioned on the confirmation email, nor at the T&Cs link. The agents who answer the booking phone number can't do anything. There is no email contact. And their customer service phone number costs 13p per minute.
So anyone in the UK thinking of staying at Travelodge, don't! They are predatory scum...
Unfortunately, hotels are also generally tightening up cancelation policies to require 48 to 72 hours notice--which of course does you zero good if the cancelation is due to travel disruption of some sort.
(You also see a lot more pre-pay/no cancel rates which I admittedly have less trouble getting upset with although it's very annoying that there's often no refund window at all if you fat finger something when you make the reservation even if you notice immediately.)
My most recent bitch with Travelodge--which I basically never stay at but it was the only last minute room I could get--was that they really didn't want me to check in without a government-issue photo ID which I lost at the airport. This was even though I had a wallet full of other cards and I had an online reservation.
Dispute it with your card issuer. It not being mentioned anywhere seems like it's clear fraud on their part and you should win the dispute. If enough people do this it will put their merchant account at risk and make them reconsider this nasty behaviour in the future.
Unlike the import/export and so on rules, this won't just magically go away at the stroke of midnight.
Most EU rules are not "regulations" but "directives" - done by the EU saying what the rough idea is, and then each government has to pass their own laws to implement that idea in an appropriate way. This is especially useful if two EU members already had roughly the rule everybody now agrees is a good idea, but slightly different - nobody has to lose "their" favourite law, so long as any members that had no law about this get one pronto. For example EU members all need rules so that if a bank fails normal people get (up to a defined sum of) their money back. The EU says this rule needs to protect all account holders of banks in the EU, so a Brit can use a Spanish bank, or a German can use a French bank or whatever. But local laws might be slightly better and that's fine, e.g. the UK law gives you slightly more money back and is indexed to the Pound rather than the Euro.
So, these British laws don't vanish in a puff of smoke, but without the EU to insist upon them they could be "reformed" in unhelpful ways, or just abolished altogether, should a government choose to do so.
Comcast may add a modem rental fee to your bill automagically even if you have your own modem (even if you have always had your own). This happened to me and the phone support told me they do this intentionally and they expect people to call and resolve it if it is not an appropriate fee.
Cablevision/Optimum (now Altice) added a modem rental charge and network expansion fee, which was the impetus for me to switch to Fios after having Optimum for 15 years across 3 different homes. I ended up paying almost half for the triple play (it will go up after a year, but is still significantly lower overall even after the discount expires).
Comcast is quite guilty of this. I’m on a 2 year contract but within one year, Comcast has increased my bill by raising the Regional Sports Fee and broadcast TV fee TWICE.
In the last 4 years, they have consistently raised these 2 fees each time effectively raising the final amount I pay which is higher than what is on my contract.
When I call to complain, they point me to a section of my contract (in small letters) which say broadcast and regulatory fees may change within the contract duration.
I wish the government would crack down on this (they are just being plain deceptive) or that they get some competition
The monopolies were probably exacerbated, rather than exasperated, though /you/ might have been exasperated.
To exacerbate a thing is to make something that was bad, worse. You will usually exacerbate the _aspect_ that is bad, but you might also exacerbate a whole thing (such as a monopoly or a house fire) if the whole thing is in fact bad.
Whereas to exasperate is to irritate very intensely when action to sooth the irritation is frustrated. So if a young child is screaming and won't stop but you know hitting them is wrong, you may be exasperated.
This is pretty much only true for cable companies. For the most part, we have lots and lots of competition, and things are generally more affordable here than in Europe (and salaries are quite a lot higher as well, even factoring in the social services that Europeans enjoy).
Yep, if you’re sick and poor, Europe is the better bargain for sure. I think it would be good for the US to have a stronger social safety net, but nevertheless, most things are more affordable in the US (my Internet is $60/month for fast speed as I live in one of the regions with ISP competition).
“The bv US”? Europe has shorter hours and more vacation, but after factoring in everything else (healthcare, taxes, etc), my salary would be at least 40% lower in even the wealthiest European countries. And as mentioned elsewhere, the cost of living is higher in Europe. I can’t justify it, which is a shame, because I really like European culture and history and would like to live there for a few years.
Many things are cheaper in Europe, eating out especially (you don’t even have to tip!). It varies of course, the Netherlands, France, and Germany are much cheaper than Denmark and Switzerland. Salaries are lower, true, but prices are fairly competitive to the states.
Eating out is considerably more expensive in Europe, even factoring in the tip. Meal prices might be slightly larger in some states, but you’re reliably getting almost twice the food. Personally I’d rather have European portions with the US price/kilo, but my wife and I usually split a meal anyway so it comes out about the same.
Last time I was in Paris, we ate fairly cheaply at the local kebab places that would have easily been twice as expensive in the states. Heck, they are cheaper than the states even in Lausanne.
Ya, portions are a bit different, but meal prices still come under on average.
I lived in France and travel regularly. Maybe kebab is cheaper (not really a thing in the US like it is in France), but meals on average are slightly more expensive in Europe.
I lived in Rennes, but traveled all over. The food is more expensive all over France compared to the US. If you compare France prices with major US metropolis prices, then sure, the prices in the US are perhaps more expensive, but overall food (and almost everything else) is cheaper in the US.
Take a look at the indices linked below—notice that food is pretty close, and notice also that the meal prices aren’t adjusted by serving size. Notice also the salaries. Notice also the rent prices (which appear astronomical in the US vs France until you realize that they don’t adjust for sq ft), then look at the adjusted sq ft prices.
I'm not so sure about the services part. These include healthcare without copay, education for your children (usually university included), and pension. For all citizens, not just the top earners in tech.
Disclaimer: I know this because I tried very hard to justify living in Europe for a few years.
It is true for salaried professionals. Salaries are about 30-40% higher in the states. Taxes (which cover education up to uni), health insurance, and 401K account for roughly 30% of our gross salaries, leaving us with more left over than our European counterparts gross (we also work more hours, but not enough to make up the difference). Of course, if you look at non-professional employees, it’s probably better to be European.
People are moving away from cable services at an accelerating pace, and switching to streaming services. so to an extent, the consumer is voting with their wallet.
Well, in a lot of places, they still keep us as customers, it's just that we become cable internet customers instead of cable television customers.
I wish there were better alternatives in the area, as I pay a lot more than I'd like to each month just for mostly reliable internet. I can't use satellite because I need it to be up even during storms, as I work from home.
I have a friend who works as a tax auditor and audits telecom companies to verify a specific tax. When he does the audit he gets the ENTIRE billing information. What is interesting to note is that there are certain taxes where the law allows the telecom to determine how much cost is required to comply with the tax (employees expenses) and then offload that cost on to the end-user. So the tax that the customer pays is actually the tax going to the government and some of that tax is also going to pay the employees hired by the company to comply with the tax. Without much surprise, the amount of employees required to comply with the tax seems to increase each year and most of these employees are never fired or let go. There is no incentive for the company to cut costs when the taxpayer is paying for the employee's salary.
Another egregious example: Frontier Communications adds a $3.99 "Internet Infrastructure Surcharge" for internet service, on top of the advertised price. But internet infrastructure is what the advertised price is for, so why isn't it already included in the price?
The underlying problem is that the US does not have a true democracy. The government here works for big businesses, not "of the people, by the people, and for the people". EU is much closer to being a true democracy.
I would say it's a small minority of readers here who actually still have/pay for cable. That industry hated and took/takes advantage of its customers that's it's finally getting what it deserves!
Myself since I'm in a ATT family plan I pay $60 for unlimited data and it comes with ATT TV formerly called Direct TV now. I do use it but wouldn't pay for it or use it if it wasn't bundle in cheaply as it is now.
To be fair Comcast these days shows you a breakdown of the full cost of the service you are signing up for, which you have to accept. So the fees should not be a surprise. Would I prefer it was all included in the advertised price, absolutely.
So, a cable television franchise has special protections enumerated in state and federal law.
They use this as a guise to provide internet, while only being responsible for the tv portion.
Additionally, the FCC has specific rules which exempt cable modems from regulation at the municipal level, which is why you see fiber convert back to DOCSIS to attach a cable model at the end.
Oh they do. The most common one is fees for renting a cable modem (which you can avoid by buying, but almost no consumers do). The article cites an "internet cost recovery fee" as well.
Remember, in the US, your TV and internet providers are typically one and the same.
CATV originally meant community antenna television, and was a ‘shared’ coaxial line that allowed multiple users to share an antenna in order to receive over the air broadcasts.
Now it is a legislative construct, used to bypass consumer protections.
Do that because it's a more empowering, tangible, and DRM-free format, but that argument also holds against streaming services who don't swindle you, so it's orthogonal to this.
If movie stars want to get paid and I can get their products for free then I will. Maybe they should fight for a society where not only the rich can get by.
Of course, this is capitalism. A company will charge whatever they can get away with for a product or service. It's not "bogus fees", it's simply "profit".
The fact it costs Nike ~a few bucks to make a pair of shoes has absolutely nothing to do with the selling price.
Just yesterday there was a related article, and I posted a similar comment, but I was right to be down-voted, to a degree.
Capitalism is about growth and competition. When there's only one cable to your home, privately owned AND they act as a middleman for content, you do not have meaningful choice.
The way to combat this is to only use that cable for internet. Ideally, there would still be competition (I'm very lucky to have cable and fiber to my home...) and go elsewhere for content.
That being said, fees that are not included in the advertised price, are not actually government mandated taxes/fees but are added on to your bill and misrepresented?
Comparison is the mechanism by which competition drives a healthy economy. There's less value in competition the harder comparing them is. It's really hard to compare when you have to dig all the way to checkout to find what you'd pay.
Imagine you're at the supermarket and different brands of milk were listed at one price, but each had different fees when you get to the cash register. No one but the cashier can tell you what each option actually costs. How many people are going to get out of the line and go back and try another brand of mystery milk when they find out they chose one with a $1 "cattle fee?" It makes competition weak and needs to be illegal.