Scots are a wee bit different than almost any other group known.
I’ll call Hiram in Edinburgh tomorrow, and try to get an answer as to whether there are enough banknotes going around to make a difference.
The people that collect sales taxes are retailers. When you buy something & pay sales tax, the tax money goes into the same fund as the rest, and the shop later sends a big bill to the government(s). Retailer’s jobs in some states would be immensely simplified if they simply charged customers the price actually paid & computed the governments’ cut later. Of course, the lower sales tax some states impose on food would complexify things if kept; but it makes retailers’ jobs harder already.
As for abolishing the penny: The ideal solution (:p) to appease American mass sensibilities appears to be deflating the currency twenty-fold, returning our coins to the value they held when last redesigned. Unfortunately, government mints & central banks are naturally inflationary, so this will not happen unless the US population adopts anarchistic currencies.
(Anarchistic currencies are not issued by the rulers of a country. They may be the legal tender of other countries–US dollars are anarchistic currency in Africa, say–but their value is determined in the marketplace, not by fiat. With competing anarchistic currencies, the more stable, less inflationary currency will drive out the less stable currency.)
Of course, that’s even more offensive to the aforementioned American mass sensibilities, so I guess it’s just time for another currency reform. This happens periodically in history. If you knew what a “penny” was in the Middle Ages, your jaw would drop. (Well, some people here know already, but you take my meaning.)
Then again, those aforementioned American mass sensibilities have gotten so used to calculating value in tiny tiny increments, it will take men each with more sense and statemanship than the entire present House of Representatives has collectively to get the pertinent policies up-to-date.
Quoth samclem:
Steel? Are you sure? I would have expected nickel, seeing how they actually make their five-cent coins out of it, too, and Canada is the world’s largest supplier of nickel.
Incidentally, real nickel will stick to a magnet, just like iron will. But the US five-cent coins haven’t actually been made of nickel for ages now. Nowadays, they, like the cents, are mostly zinc.
You might want to check on the five-cent coin composition as well.
Cite: www.mint.ca
Actually, for a lot of purchases (especially at fairs, ball games, etc.) vendors are already setting their prices to be even amounts. Like a hot dog will be priced at $1.87, then with .13 tax the price will be an even $2.00. Saves a lot in having to give change, etc.
AndrewT noted that in Australia rounding to the nearest 5 cents occurs during physical transations only. I don’t see why that wouldn’t work in the U.S.
To some degree we already do it: Gasoline is sold by the gallon with prices listed in 9/10ths of the cent (e.g., $1.729 per gallon). Once you’ve completed the transaction, your final cost is rounded up or down to the nearest cent (e.g., 14.287 gallons @ $1.729 per gallon = $24.702223, rounded to $24.70).
As long as rounding was done fairly (0 to 2 cents rounded to 0, 3 to 5 cents rounded to 5), I’m all for it. Junk the penny.
That’s indeed absolutely not an issue. Before the Euro, the franc was divided into 100 centimes. The one centime coin (which would have been worth roughly 1/5 of an american cent) was discontinued I believe at the beginning of the 70’s, but apart from physical transactions, centimes would appear everywhere. On my paycheck, for instance, on my bank account, etc…
Same for the stocks, since someone thought it could be an issue…their value was calculated to the last centime, and since you wouldn’t pay stocks in cash, they were also paid to the last centime. The centimes only dissapeared as actual coins and for prices in shops, but were still used for all non-material transactions.
Actually, for non-physical transactions, for stocks, etc…you could decide that the price would be calculated up to 1/ 1 000 000 of a dollar, for instance, and it wouldn’t matter that there’s no such thing as a 1/10 000th cent coin. For instance, when the Euro was introduced, the exchange rates used had something like 6 digits, and this was the value used for all calculations, though there isn’t of course any coin worth 0.00001 Euro.
Keeping or not the pennies would have no practical consequences whatsoever on immaterial transactions, stock exchange, etc… The units you decide to use for them is totally arbitrary and doesn’t need to really exist as a coin. Actually, it doesn’t even have to exist as a currency at all…transactions were conducted in Euros, and long before that in ECUs (European Currency Units) though there were no actual Euros (let alone ECUs), circulating yet.
As big an advocate of penny-elimination as I am, there’s something I think I never mentioned. Cecil said:
But I am suggesting that. I think it would make things simpler. However, I agree with Cecil’s point, that it would not be at all necessary to round all prices (except totals) in order to rid ourselves of a one-cent piece. I would be happy if we lost them, but just a little happier if we took the next step as well.
Asserts Chronos
Wrong.
US nickels were NEVER made of only nickel. They were never more than 25% nickel. The rest was copper. Just like it is today.
The US has NO Zinc nickels. Never did.
I just opened a video store and one of my big decisions was to make all prices in “even” amounts (increments of 50 cents) by including the tax in the “price”. All it takes is some basic division and subtraction. We’ve been open 3 weeks and have yet to use a coin smaller than a quarter! Aren’t I smug?
You’ve piqued my curiosity. What was a penny in the Middle Ages?
I think anytime a business that rounds off, it will do so in favor of the customer – because the customers would object to any business rounding off in their own favor. The businesses will not lose money. All they will need to do is adjust their prices very slightly.
Re sales taxes, I have never understood why all businesses don’t set their prices so that price + sales tax will equal a total that does not require the use of pennies. Sales taxes do not change that frequently. They often stay the same for years. On the rare occasions that the tax increases, the prices could be readjusted.
One possible reason for not doing the above is that merchants absolutely hate sales taxes, so perhaps they feel that such adjustments would constitute cooperation with something they hate. Or perhaps they want to see to it that sales taxes are annoying to the customers, in the hope that the customers will demand the scrapping of sales taxes. But dealing with all those pennies is a just as much a problem for the merchants as it is for the customers.
Good for you! I wish all merchants had this much common sence. As most do not, one constantly has to deal with small perchases (such as renting one video) coming to annoying totals like $2.11 or $3.16 or whatever.
I stand corrected, of course, although I suppose one could say that “not ever” is consistent with “not for ages”. And I got a bit confused about what other metal is used; the important point is that it’s not nickel.
If they were never pure nickel, though, whence the common name for the coin?
(referring to US five cent pieces starting in 1866).
Funny you should ask.
The name actually came about in reference to the ONE CENT pieces of 1857-1864. This was BEFORE we made five-cent “nickels.”
In 1856-7, the government decided to quit making large cents(pennies to the average American of today). The large cent coin which had been in use from 1792-1857, was larger than a modern quarter, almost half-dollar size. This was also when the government esentially started calling in all foreign silver coins, making you exchange them for US silver and the new “nickel” cent pieces. The US was actually gonna be on the decimal system at last, getting rid of all the foreign coins that were used in daily trade.
They made one cent coins, starting in 1857, out of 12% nickel and 88% copper. And reduced the size to that which exists today. The coins took on a “whitish” color, much paler than pure copper large cents that the public was used to. And the public started calling them “nickels” in reference to the added nickel content of the coin.
When the government started making five-cent coins out of 25% nickel, 75% copper in 1866, the public quite rightly called these bastards “nickels,” as the one cent coins made with nickel had been discontinued in 1864, replaced by pure copper ones which were the size of the modernd US cent… Confused yet?
JUst don’t get me started on “plugged nckel.”
:eek:
Basically, it was a moderately substantial silver coin. It was the basic unit of currency–not a division, but a basic useful unit–for a long time. OK, that’s not exactly jaw-dropping, but pretty different from the modern cent.
Courtesy Google:
[url=http://www.irishcoinage.com/PICINDEX.HTM]Index of pictures of Irish Coins*
[url=http://www.bignell.uk.com/english_currency.htm]History of English Currency*
[sheepish]
Courtesy Google:
Index of pictures of Irish Coins
History of English Currency
As Andrew T mentioned, Australia got rid of its low denomination coins with the 5 cent coin being the smallest unit. All prices (especially in supermarkets) may be listed as any number of cents such as 99 or even 1.
If 5 items are bought at 99 then 5x99=4.95 and 5 cents change given from 5 dollars. If it’s 4 then 4x99=3.96 and 1.05 change given.
As a matter of fact, there was one fellow who walked into a supermarket and bought 1 mushroom - since it cost 2 cents, it was rounded down to zero and he walked out with a free mushroom. The economics of it doesn’t make it worthwhile going through the checkout a dozen times. In any case, the organisation has the right of refusal to serve.
We use rounding to the nearest 5 cents - down for 1 and 2 cent differences and up for 3 and 4. It pretty much balances out without the hassle of having to deal with stupid little coins.
The biggest problem we faced when this occured was mainly misunderstanding, especially from pensioners and low income earners as they thought it was a de-facto way to increase prices.