The stock exchange doesn’t do anything in fractions of a penny. They do things in fractions of a cent. The cent is the monetary unit; the penny is just the coin that we currently use that happens to be worth one of those units. Nobody’s advocating getting rid of cents, just of pennies.
And really, those stock market quotes provide a good proof of concept. People make use of those sub-cent units just fine, even without any coin that has that value. In the same way, we could continue to account in cents just fine without the penny.
We’re already getting screwed 8% in my area. Let’s say a nice pair of jeans and shirt are 62.60. thats 5.008 and rounds to 5.01. Without any pennies they are going up to 5.05 tax. I’m pretty sure sales tax always rounds up.
Is sales tax rates always a whole number? I can’t recall if some cities allow 7.5% or 7.2% 7.25% rates. If they do, then the rounding issue on sales tax costs us even more. Because the calculation is less likely to result in a even number.
That’s not the way that rounding would work. From the link in the OP, “For cash transactions that end in 1, 2, 6 or 7, the transaction is rounded down to the nearest nickel. For cash transactions that end in 3, 4, 8 or 9, the transaction is rounded up to the nearest nickel.”
And yes, in some areas, the sales tax rate is not a whole number. Sometimes it’s 7.25% or 5.5%.
Something else to consider, the rounding only applies to the total purchase, not to individual items.
1.99 + 1.99 + 199 = 5.97 for a charge of $5.95 (it would be $6 in New Zealand since we round to the nearest 10c).
My grocery bill is full of odd amounts, it doesn’t matter if I buy 3 items or thirty, the total amount of rounding will be 5c at most (3c for Aussies or hypothetical Americans). If I were particulary concerned about my total being rounded up a few cents, I could purchase a carrier bag for that 5c and enjoy the fact that my total would now be rounded down.
Just a figure of speech. I didn’t mean to start any debate on taxes. They are with us always until we die.
We just passed an additional 1 cent sales tax bill last year. If they kill the penny I wasn’t sure how that effects the sales tax we pay. I don’t want it always rounding to the nearest nickel. That could add up fast if you consider how many purchases you make in a year.
That’s the point I’m trying to make, it could just as easily round down. Over a year the difference may be small, non-existant, or slightly in your favour.
With computers it would be very easy to ensure each item is priced so that it rounds up or that the total would round up. I support getting rid of pennies or nickels, provided totals are always rounded down.
Let’s say a merchant makes four cent on a transaction by rounding and has 500 a day. If you take 500 X .04 x 365 = $7,300 extra dollars if you ensure you’re always pricing to get the extra money.
So either require merchants round down or that they report any up rounding as sales tax
I’d like to know how it’s possible to use a computer “to ensure each item is priced so that it rounds up or that the total would round up” given that the customer might buy anywhere from one to fifty items in a transaction.
I would say round up to the nearest .05 of the total purchase with all proceeds going to public schools in that county. While it wouldn’t come anywhere close to fixing it off, every little bit helps and all. In a county of 250,000 people it would probably total up to well over $1 million per year, which is enough to at least buy sanitary napkins and printer paper and other essentials for the year that students currently have to bring in for some districts.
I save my change and cash in a few times per year as well, and I never realized just how worthless the penny was until last year when I started saving all pennies separately for a local charity. My cashed in quarters/dimes/nickels would usually be around $40-50 or so when I cashed it in, but the pennies that collected for just as long were rarely more than $1 and never much more. (Even adding in nickels only raised it to $5 or so.) Even in a bad year $1 for several weeks is a trivial amount to an individual but collectively could help out schools.
Or, nationally, could be applied to National Debt, but even with the pennies of 300 million people- adding up to perhaps a few billion dollars per year- I don’t think that would ever make so much as a scratch in a dent on the debt.
When 1 and 2 cent coins were first abolished here, supermarkets always rounded down. $xx.99 was $xx.95 at the till. Now they’ve changed to rounding to the nearest 5, so totals ending in 1, 2, 6 and 7 cents round down, while 3, 4, 8 and 9 round up. Electronic transactions at the point of sale are ubiquitous now anyway, and obviously those transactions don’t have to round off at all.
Shelf prices didn’t change. If you round off all the $x.99 on the shelf to a whole dollar, you pay an extra cent per item. Rounding off at the till, you only pay an extra couple of cents at most on the whole transaction (unless it rounds down or the final figure is a multiple of 5).
Petrol (gas) is still priced to a fraction of a cent too, eg 141.9cents / litre.
So you are saying it’s the numbers stored in your bank account, the electronic representation off all those pennies that are useful to you. Not the actual physical pennies themselves?
The actual piece of metal is not worth enough to carry to as store and make a transaction with? Shouldn’t that be the point of coins and currency?
There’s an entire generation of Americans who think of coins and change as something to store up in jars to take to the bank to exchange for ‘real’ money. Not as an object you hand to a clerk to buy a cup of coffee.
I was also confused by Dangerosa’s statement that she uses pennies via her checking account. I think there is confusion here between the cent (the unit of currency of one-hundredth of a dollar) and the penny (the actual copper-clad coin that has Abraham Lincoln on it). No one here is proposing elimination of the cent, just the penny coins.
This being unfortunately true for at least the near future actually means there’s hardly a point in even discussing this. No room for common cents here.
Believe it or not, but there are still a lot of places (small mom and pop shops) that don’t use computers for pricing and aren’t set up for it. You’re forcing a burden on them. As far as the ‘extra money’, well, they’d have to pay sales tax on it, anyway, so it’s not like they’d get the full 7,300, anyway.