[This issue is a common misconception from people from other countries when they compare US Prices, e.g., published by Apple, with those charged for the same product in their respective countries. This is true not only for Apple products but also for all other goods and services sold or charged to customers in the US.
I am not an economist, and the purpose here only is explain and perhaps reduce the same questions asked, in regard the pricing of products in the US vs. the comparable product price in the respective countries of the various inquirers.]
It is true that many products in the US may be cheaper than in other countries and there are many reasons for this, but beyond the scope of this post. However, the published priced of a product (in this case, those of Apple) in the United State, IS NOT the TOTAL PRICE because different states or some localities have differing state or even additional city or county local taxes. [In contrast, in many other countries, the published price may already include the VAT "tax" — this would explain in part the seemingly higher prices charged in other countries wrt Apple pricing in the US.]
First. Some states don't have local SALES tax at all; thus. for these states, the Apple.com price will be the same as the total sale price. [For this reason, some people in MA who live near New Hampshire (NH) will go to NH because the state does not impose any STATE sale tax. However, no one from Boston would go to NH to buy Apple products there because of the extra cost and time involved.] Nevada also does not have a STATE sales tax. So, tourist to the Casinos may take the opportunity to buy stuff when in Las Vegas.
Some cities or counties will charge the standard State Tax that average from 5-10% of the price, while some cities or counties may charge additional city or county taxes, but the total seldom exceed 10-15%.
In Boston, MA, there is no SALES tax for certain necessities (e.g., clothing, food??, etc.) up to US$200??? per purchase and MA even has a Tax free holiday each year. The STATE sales tax for other items was 5% but this was increased slowly during the past few decades to 6.25% -- much, much lower than the VAT taxes and other taxes in many other countries, especially in Europe and Canada***. For this reason, many visitors in Boston from other countries visit the Apple Boylston Store in Boston to buy Apple products. [http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html]
Second. Currency fluctuations. Following the economic and stock market crash in 2008 and the subsequent worldwide economic instabilities since then, currency exchange rates have been fluctuating wildly worldwide. In fact, many "speculators" (individuals and institutions) have analyzed these currency fluctuations to make profit from these instabilities. Some earned billions and billions, although others lost in these speculative venture.
Companies, like Apple that, that have substantial income from other countries, try to protect from these wild variations in currency values by buying insurance. But last year, in spite of their insurance, were it not for Apple "losses" from foreign currency fluctuations, Apple would have exceeded the "analysts expectations" for the "1st Quarter of 2016". To mitigate these "currency fluctuations losses", Apple has been very severe in its mark ups (wrt to the US Dollar) of Apple products in many other countries worldwide.
Third. Value Added Taxes. It is political suicide to raise taxes in the US at the federal and local levels. Further, what is called "trickle down economics"*** - lowering income, dividend and capital gains taxes for the rich and corporations with the expectation that those "savings from lowered taxes will then be invested to uplift the plight of the whole country -- has been the mantra for many decades now in the US.
Should you buy your Apple Products in the US? You may be able to do that, especially the iPhone, provided you take into consideration the added cost for purchasing and shipping products from the US to your country, plus additional insurance cost, if needed and the possibility of the other charges that may be levied for goods purchased from abroad. This is a common practice though among visitors coming to the US whose fare is covered by other legitimate travel activities, or those who are willing to purchase the product for family or friends.
________
***This did not work out as well as desired so that budget deficits at the federal level were curtailed by decreasing the funds allocated for many social services. State and local communities (cities and counties) relying heavily on these federal funds) may have resorted to levying or increasing taxes or other fees at the local level to compensate for reduced federal funding. [Other states and communities opted to abolish many social programs instead.] States with other more stable sources of income, tend to avoid increasing local sales taxes.
Because these sales taxes are decided at the state and local level, there is no uniform "sales tax" among the 50 states in the US. As a result, pricing for goods and services, is not included in published prices, and added only after the purchase has been made.
Prices of Goods and Services in the US vs. Other Countries. In contrast, in many countries, especially in Europe, the published price of goods and services usually include the value added tax (VAT) and other fees???. For a number of reasons, the VAT is much much higher in other countries compared to the local state and local taxes in the US.
CGC
I am not an economist, and the purpose here only is explain and perhaps reduce the same questions asked, in regard the pricing of products in the US vs. the comparable product price in the respective countries of the various inquirers.]
It is true that many products in the US may be cheaper than in other countries and there are many reasons for this, but beyond the scope of this post. However, the published priced of a product (in this case, those of Apple) in the United State, IS NOT the TOTAL PRICE because different states or some localities have differing state or even additional city or county local taxes. [In contrast, in many other countries, the published price may already include the VAT "tax" — this would explain in part the seemingly higher prices charged in other countries wrt Apple pricing in the US.]
First. Some states don't have local SALES tax at all; thus. for these states, the Apple.com price will be the same as the total sale price. [For this reason, some people in MA who live near New Hampshire (NH) will go to NH because the state does not impose any STATE sale tax. However, no one from Boston would go to NH to buy Apple products there because of the extra cost and time involved.] Nevada also does not have a STATE sales tax. So, tourist to the Casinos may take the opportunity to buy stuff when in Las Vegas.
Some cities or counties will charge the standard State Tax that average from 5-10% of the price, while some cities or counties may charge additional city or county taxes, but the total seldom exceed 10-15%.
In Boston, MA, there is no SALES tax for certain necessities (e.g., clothing, food??, etc.) up to US$200??? per purchase and MA even has a Tax free holiday each year. The STATE sales tax for other items was 5% but this was increased slowly during the past few decades to 6.25% -- much, much lower than the VAT taxes and other taxes in many other countries, especially in Europe and Canada***. For this reason, many visitors in Boston from other countries visit the Apple Boylston Store in Boston to buy Apple products. [http://www.mass.gov/dor/individuals/taxpayer-help-and-resources/tax-guides/salesuse-tax-guide.html]
Second. Currency fluctuations. Following the economic and stock market crash in 2008 and the subsequent worldwide economic instabilities since then, currency exchange rates have been fluctuating wildly worldwide. In fact, many "speculators" (individuals and institutions) have analyzed these currency fluctuations to make profit from these instabilities. Some earned billions and billions, although others lost in these speculative venture.
Companies, like Apple that, that have substantial income from other countries, try to protect from these wild variations in currency values by buying insurance. But last year, in spite of their insurance, were it not for Apple "losses" from foreign currency fluctuations, Apple would have exceeded the "analysts expectations" for the "1st Quarter of 2016". To mitigate these "currency fluctuations losses", Apple has been very severe in its mark ups (wrt to the US Dollar) of Apple products in many other countries worldwide.
Third. Value Added Taxes. It is political suicide to raise taxes in the US at the federal and local levels. Further, what is called "trickle down economics"*** - lowering income, dividend and capital gains taxes for the rich and corporations with the expectation that those "savings from lowered taxes will then be invested to uplift the plight of the whole country -- has been the mantra for many decades now in the US.
Should you buy your Apple Products in the US? You may be able to do that, especially the iPhone, provided you take into consideration the added cost for purchasing and shipping products from the US to your country, plus additional insurance cost, if needed and the possibility of the other charges that may be levied for goods purchased from abroad. This is a common practice though among visitors coming to the US whose fare is covered by other legitimate travel activities, or those who are willing to purchase the product for family or friends.
________
***This did not work out as well as desired so that budget deficits at the federal level were curtailed by decreasing the funds allocated for many social services. State and local communities (cities and counties) relying heavily on these federal funds) may have resorted to levying or increasing taxes or other fees at the local level to compensate for reduced federal funding. [Other states and communities opted to abolish many social programs instead.] States with other more stable sources of income, tend to avoid increasing local sales taxes.
Because these sales taxes are decided at the state and local level, there is no uniform "sales tax" among the 50 states in the US. As a result, pricing for goods and services, is not included in published prices, and added only after the purchase has been made.
Prices of Goods and Services in the US vs. Other Countries. In contrast, in many countries, especially in Europe, the published price of goods and services usually include the value added tax (VAT) and other fees???. For a number of reasons, the VAT is much much higher in other countries compared to the local state and local taxes in the US.
CGC
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