My theory is it's part blame shifting. It's not us (the store) that makes the price high, it's the government!
At gas stations they do advertise the price including tax, yet there's a big sticker on every pump explaining they (the gas station) are only responsible for part of the price with a nice pie chart of all the taxes added on top.
Anyway it's always best to advertise with the lowest price, hence also Only $349* *After $50 mail in rebate. Screw that. (Does a mail in rebate refund you the taxes as well btw?)
It sucks anyway. I had enough points on my credit card to get a nice new laptop, high-five it's 'free'. Get to checkout, that will be the rest of the points plus another $72 to pay for the rest of the tax.
It does seem like that is the case. But I'm surprised that this kind of confusing thing is accepted in the US, and pretty much no where else in the world that I know of, except Canada.
When I go shopping, I'd like to know exactly how much I have to pay. If I'm strapped for cash and only have $5 and want to eat, I have to count on a buffer of at least 10% in the US, depending on where you are.
I looked into this further on Google, and it seems like what you mentioned is the primarily mentioned reason. But there also seem to be some sort of concerns about implementing VAT, but I'm seeing many more counter arguments to that.
And I read this on Wiki:
"Another avenue of criticism of implementing a VAT is that the increased tax passed to the consumer will increase the ultimate price paid by the consumer. However, a study in Canada reveals that in fact when replacing a traditional sales tax with a VAT consumer prices actually fell."
Anyway, I thought perhaps there was a quick and logical answer to this. That's why I asked.
But it seems the answer is not particularly clear, so maybe I'll make a separate topic about this issue later instead.