Penny Coin Is Worthless... ?

From my experience when I visited the the U.S., the Cent is used to make up the exact change at checkouts after paying the differing states taxes.

This situation will always continue whilst states taxes are seen to be essential by the states.

It would make sense to have the Feds to collect the states taxes and reimburse them to the states.

If this was done, states taxes could be rationalized and averaged.
Such an arrangement would allow the states taxes to be included in the sale price at the checkout and rounding the the nearest 10 cents (or whatever is convenient), to be easily achieved.

Then you can say goodbye to the lowest denominations as required, as inflation takes it's course.

Similar tax systems, like what is suggested here, already operate without major problems, in a large number of first World countries.

That way, U.S. citizens need to pay a Federal tax only, but it would reflect an increase in what you already pay in states taxes.
Philosophically a good idea, because U.S. citizens first consider themselves first U.S. citizens, before they consider themselves a citizen of a particular state.

(Perhaps I may be a proud Texan, if I lived there ! )

I think that @ultrarant has identified the core issue.

It is really a political decision. Emotions and perceptions are more important than logic or economics. In terms of money lost, it is small compared to other government activities, and I am sure that it is not a high priority.

It doesn't matter what the logical members of the CCF think, we are not making these decisions.

For Americans, if the issue is that important, they can speak with their Senator/ member of Congress. There are probably some already pushing this issue.

Proof of this can be found in Europe, where all countries have sales tax included in the prices. And indeed, a lot of prices end on a 9. be it Euro 0.99, or Euro 999.99. This means in the case of The Netherlands that a product sold at Euro 99.99 is actually Euro 82.30 plus Euro 17.69 in sales tax.

If you pay cash, you pay 100 Euro anyway, as The Netherlands abandoned the 1 and 2 cents a few years ago. If you use electronic payment, you pay Euro 99.99. And if you buy 2, you pay Euro 200 with cash. If you buy three, on the other hand, you only pay Euro 299.95 with cash. That's Swedish rounding.

So if you're smart, you pay all sums ending on 1, 2, 6 and 7 in cash and all the others else electronically. Think of how many cents you can earn!

And it would work here just fine.


They will still do it. One, we still have sales tax, and two, electronic payments will still be to the cent. It does not matter though. Really. People will get used to it.

Point is, getting rid of the cent will not cause our economy to collapse. Event the dumbest of the dumb have more difficult problems than losing use of the cent. Trust me, I was at the DMV this morning, I know this for fact.

Changing the trick is unnecessary because sales tax will always alter the total.

One thing I am almost sure of, even if the one cent coin disappears, the word "penny" will not. "pennies" have not been used in the US for 250 years but the word is still used for the one cent coin.

It's true even in the Sweden-Norway. Despite not having had a .10 coin for more than 20 years prices for smaller items typically end with .90. It's always being rounded up. This is to keep the illusion of lower prices with lower-value items.