POLL - When will the penny be taken out of circulation?

[inflationhawk]

I went 2020 or after. I think long after... if ever. No penny means that every state that has a sales tax (are there any that don't?) would have to re-visit their sales tax scheme. Every business that accepts cash for payments would have to be ready to apply the new scheme. They'll make plastic pennies before they go down that path.

Rob

Sales tax wouldn't have to change. Rounding occurs after tax has been applied in the countries that have eliminated the penny.

The elimination of the penny has occurred in Australia, New Zealand, Switzerland, Brazil, Denmark, Norway, Israel, the Netherlands and South Africa. Are they more advanced and better equipped to deal with change than America?

[hammerrob]

I went 2020 or after. I think long after... if ever. No penny means that every state that has a sales tax (are there any that don't?) would have to re-visit their sales tax scheme. Every business that accepts cash for payments would have to be ready to apply the new scheme. They'll make plastic pennies before they go down that path.

Rob

Sales tax wouldn't have to change. Rounding occurs after tax has been applied in the countries that have eliminated the penny.

The elimination of the penny has occurred in Australia, New Zealand, Switzerland, Brazil, Denmark, Norway, Israel, the Netherlands and South Africa. Are they more advanced and better equipped to deal with change than America?

Hmmm ... so your argument is that the penny goes away and all state governments will be satisfied that retailers will round transactions as they would like it to happen, without them having to change the sales tax laws? That doesn't sound like the state that I live in. In my state, some opportunistic pols will always want to see the transactions round up to the nearest 5 cents (effectively a sales tax increase). Others will want to always round down (effectively a sales tax decrease). Some might even want to see traditional rounding take place (neutral sales tax impact). In my state there are laws about removing snow from your car, you can bet they would make sure that the law was amended to define how sales taxes would be rounded.

If they got rid of the penny in those countries you mention without changing sales tax laws then, yes, I think those countries are better equipped to deal with change than America (but I think we would kick their a**es at collecting sales tax).

[ZenOps]

Why mention the Euro, many are running from it right now. I'll have to agree, that as poor as people are getting, that penny is not going anywhere soon. I always have idea. One being, stop making the penny, round up and use that money to pay off the deficits.
Still, I contacted my congresswoman and told her to tell the people in charge to just stop making the cotton dollar, so instead they stop with the coin dollar instead. My idea of using the two dollar bill to ease the pain of going to the 1 dollar coin will never happen.

There were suprisingly few pennies made if you think about it. 15 million tonnes of copper is produced each year worldwide. Go ahead and work out the melt value and or tonnage of all the pennies ever made, and it wont even come close.

The US could sell all 287 million ounce gold reserves of the entire country ($459 Billion) and it would cover the *interest payments* on your $15 trillion debt for about 1 and 1/2 months...

Canada made 1.85 billion pure nickels from 1922 to 1981. If you paid one nickel per day for each person in China, you would have enough - for one day. And here in Canada we (used to) produce 30% of the worlds nickel.

[inflationhawk]

So your suggesting that when paying cash the state requires you to round up first and then apply sales tax and round again?

If using a payment card no rounding will take place at all and if cash is used rounding only applies once, after the tax is applied. That's the way this has been applied in at least 3 of the countries I have personal experience with, can't say for sure on the rest, but doubt it's any different. I've never seen or heard of a double rounding scenario.

[NHsorter]

There needs to be a spot in the poll for "Tonight" - Because as soon as I get home there are gonna be a bunch of pennies that will be taken out of circulation

[hammerrob]

So your suggesting that when paying cash the state requires you to round up first and then apply sales tax and round again?

If using a payment card no rounding will take place at all and if cash is used rounding only applies once, after the tax is applied. That's the way this has been applied in at least 3 of the countries I have personal experience with, can't say for sure on the rest, but doubt it's any different. I've never seen or heard of a double rounding scenario.

OK, I buy a pack of gum. Gum + Tax = $1.03

If there's no more pennies inflationhawk says I round that up to $1.05 for customers paying cash
My donkey friends in the statehouse want to always round up, so they say I pay $1.05
My elephant friends in the statehouse want to always round down, so they say I pay $1.00

++++++++++++++++++++++++++++++++++++++++++++++++++

Now I buy a soda. Soda + Tax = $1.02

If there's no more pennies inflationhawk says I round that down to $1.00 for customers paying cash
My donkey friends in the statehouse want to always round up, so they say I pay $1.05
My elephant friends in the statehouse want to always round down, so they say I pay $1.00

++++++++++++++++++++++++++++++++++++++++++++++++++

No double-rounding scenario here, just different ways of looking at how to round. But if pennies go away, my friends in the statehouse are going pick one of the three different rounding methods above and amend the existing sales tax laws.

[inflationhawk]

The state should have no say in any of those scenarios. The rounding part of the transaction is not taxable. It's left to the vendor to round however they want. If you don't like how one vendor rounds, you can shop elsewhere to a vendor of your choice. This is how it works elsewhere. Standard rounding is not that hard of a concept and works in both directions.

[uthminsta]

Some people did research on the actual effect it (rounding) would have on the average consumer... their conclusion was that it would make a difference of something like $2 or $3 a year.

[inflationhawk]

This is an older, but good article about a study done on eliminating the penny.
http://www.wfu.edu/wfunews/2006/2006.07.18.w.html
Has anyone ever seen any documented research on how eliminating the penny is inflationary? I've never seen one, but would be very interested in reading one.