So Trump and Musk are getting rid of the penny. It's about time. I swear I can recall Bill Bradley on Merv Griffin advocating for this even before he was Senator; maybe even as early as 1973. It was already a good idea then. Given inflation, the nickel would now be a worse deal than that, and a dime would just break even for efficiency. Get rid of them both. No one uses coin 50-cent or dollar pieces anyway, leaving only the quarter as a useful coin.
Pennies rip up your pants pockets. I hate 'em. And they just don't fit conceptually with a world with a quantum internet waiting in the wings.
7 comments:
I agree the idea has been floating around for a long time, which is probably a good indication that actually eliminating pennies would cause more problems than it would solve. (I totally agree about the lunacy of producing dollar and half dollar coins, however.) There's been a big vibe shift but I doubt that it's big enough to make people willing to have every transaction rounded up to the nearest nickel (no business is gonna be rounding any transaction down). That raises the issue of how to account for sales tax. Is that 4 cents just extra profit, or is it subject to sales tax? How do split it for a transaction with items that are both taxed and not taxed?
The problem is more how to keep pennies in circulation, as was shown with coin shortages during COVID. If it costs 2-3 cents to make a penny, how about a program offered through banks that gives you 1.5 cents for every penny you turn in, which should reduce the number of pennies that need to be minted.
This probably applies to cryptocurrency too: https://xkcd.com/2030/
What about those souvenir penny machines?
So all my transactions will be rounded up from 1-5 cents? What's that work out for a company like WalMart? A few million a year? Will it be electronic transactions too or just cash?
Because $3.99 is chosen in order to look significantly less than $4.00, I would imagine that at the retail level the new price will be $3.95
$3.95 + 8% local tax = $4.27 ... $3.99 +8% local tax = $4.31
That $0.04 is valuable for the retail store and the locality/municipality. The retail store will increase it to $4.00.
Canada ditched their penny in 2012. Euro 1-cent coins are still used in most Euro-zone countries, but Belgium, Estonia, Finland, Ireland, and Italy do rounding to the nearest 5-cents of the total transaction (not by item).
In the UK past discussion on the penny noted that "potential inflationary effects from the rounding of prices caused by scrapping the 1p would likely be minimal, given only 3% of payments by value are made in cash and card payments would continue to be made unrounded."
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