Canada stopped producing pennies in the fall of 2012. [0]
The sky didn't fall.
There was no great debate, no public opinion polls and politicians swearing heartily about the demise of our great nation. (Ok that's probably not true. For too many politicians that's all they do.)
There was resistance when Canada dropped the $1 bill in favour of a Loonie (a $1 coin with the image of a loon on it). People bitched about having too much change in there pocket, pockets became too heavy, etc. I do however see more coins in tip & donation jars now then I ever saw paper money.
This is a key difference between US policy & Canadian policy that I have informally noticed while growing up on the border (with family ties on both sides).
Canadian government: We think it's a good idea, so we're going to do it.
US Government: Lets have more opinion polls, and countless politicians swearing against any decent public reform or change to the status quo. Watch the media whip the public up into a frenzy. I guaranty that this will create a more frantic response and airtime then the BLM & Police Reform protests did.
Side note: If you drop the penny, for the love of $diety change your sales tax structure so that it's a multiple of 5. 5%, 10%, 15%, etc... Since Canada changed but left the taxes the same (14% in Ontario IIRC) there seems to be a lot of rounding-off in favour of companies instead of consumers.
$0.01-$0.02 per transaction * millions of transactions per day has got to make some accountants happy.
> Since Canada changed but left the taxes the same (14% in Ontario IIRC) there seems to be a lot of rounding-off in favour of companies instead of consumers. $0.01-$0.02 per transaction
This assertion is wrong. If the item you buy is $1.00, then after your 14% tax it will be $1.14, which is rounded up to $1.15. If the item is $2.00, then after tax it is $2.28, which also rounds up to $2.30. But if the item is $3.00, then after tax it is $3.42, which rounds down to $3.40. If the item is $4.00, then after tax it is $4.56, which rounds down to $4.55.
Secondly, the rounding to nearest nickel is done per transaction, not per item. So if you go to a supermarket and pick up 3 items costing exactly $1.00, then the total you owe is $3.42 (which becomes $3.40 in cash), and it is that amount that is subjected to rounding, not the individual items (which are $1.13 and would round to $1.15).
I live in Toronto and have analyzed my retail receipts. (I'm aware the HST is currently 13% but that's not relevant to this argument.) The rule about rounding to the nearest nickel is sensible enough, but I've witnessed various weird behaviors. For example, each vendor has a different kind of wording to show how they rounded your cash transaction. Some use a negative sign to show that the penny rounding deducted money from your total owed, while some use a negative sign to show that the penny rounding increased your total owed (as if you paid negative money). Also, a few vendors always round down to the nearest 5 cents (to appear nice to the customer), which causes a surprise when I'm trying to prepare the correct amount of change. Finally, some vendors don't display cash rounding on their receipts, so for them it is an oral culture that isn't formally written down.
Also, it's only cash transactions that are rounded. If you pay by debit or credit (which I would guess is the majority?) then it's still the exact amount and nothing has changed.
Regardless of what the practice is in Canada, I have zero faith in literally any US business to round down on anything, at anytime, for any reason at all. It will, I guarantee, be round up on everything.
Note that you can also, while you're at it, abolish rounding.
You already have this in some sense on gas pumps: the price advertised has taxes included so you are not always playing guess-the-final-total with your money. Just pass a law that requires fair advertising of the actual amount the purchaser will pay, taxes etc. included. If there are special circumstances that might make certain people exempt from a tax -- SNAP is sales-tax free, for instance -- there are several ways to handle that but it's clearer when phrased as a discount rather than as an evasion of a tax.
Well, yes, this...
I am European and during my brief stay in the USA the fact that taxes were added at the cashier was awkward.
I am sure you had your reasons and if you grow up in that sustem you won't notice much, but it looks a bit counterintuitive to foreigners.
It's insisted upon by anti-tax advocates, so that Americans always get reminded about exactly how much the government is adding onto the price. Otherwise, the theory goes, we would get too happy about taxes.
That happened in Washington state when Costco sponsored a privatization initiative to allow liquor to be sold by private stores and abolish the state stores. The private stores started advertising the non-tax price with tiny print saying that tax would be added at the register (when the state sold liquor, the price on the shelf included all liquor taxes). People were pissed thinking that the state had been ripping them off until they got to the register and found that the price was pretty much what they paid before. Actually they were paying a bit more, most people didn't read the initiative before voting on it. Now the stores print the total price in their advertisements.
Maybe I'm wrong, but I don't think there is any law that says businesses have to add sales tax on separately. Since it's the business who actually pays the tax not the consumer they could just take it out of their own profits.
However, the reason I think stores do this is: If store A is selling candy bars for $1 (+ $0.05 tax at register) and store B is selling candy bars for $1.05. Most people would buy their candy from store A because their prices are lower.
Sometimes stores will structure sales that way ("we pay the sales tax" sales), so I expect you're right.
The situation where it comes up is the idea of an American VAT. Because it applies the tax before the store even sees the good, the tax ends up baked into the price. And people like Grover Norquist have argued against a VAT specifically because of that: "The VAT is embedded inside the price of a good (as opposed to the U.S., where sales tax is transparent and on top of the price). As such, people forget they pay it, and European governments have found it too easy to raise the tax repeatedly over time."
Business collect and remit taxation on behalf of the customer, so no the business is not "paying" the taxes. It is the consumer that owes them the business is just collecting them for the government. For which the business gets a small fee to do this service for the government.
If the business did not collect taxes then you the customer owe that to the state still and are suppose to self report that and pay the owed taxed annually
This is the same as Tax withholding from a paycheck, you owe the taxes but your employer is collecting and forwarding them to the government on your behalf, the big difference here is the purchases are not tracked by individual tax payer
> If the business did not collect taxes then you the customer owe that to the state still and are suppose to self report that and pay the owed taxed annually
Interesting. But do people actually do this in practice? I wonder if states report what percentage of sales tax comes from businesses vs individuals.
In practice no people do not generally self report that is why there has been several high profile law suits from states wanting online businesses to collect state sales taxes on all sales shipped into the state
Before 2018 or 2019 unless a business had a physical presence in the state it was outsize the reach of that states laws on taxation, as the Federal government has the exclusive domain of regulating interstate transactions under the US Constitution.
However in 2018 or 2019 the Supreme court has ruled that a business shipping into a state provides enough "nexus" for a business to fall under state regulations on sales tax collection. All but one state now require any business shipping a product into the state with a total sales volume of more than $600 for that state must collect sales tax, one state says any sales at all you must collect.
So the "loop hole" of buying from out of state to avoid state sales taxes no longer exist as almost all businesses now need to collect all taxes for all taxing jurisdictions in the US of which there are around 10,000 different tax jurisdictions as many area's have city and/or county level taxes in addition to the state taxes making this is very complex issue
Companies like Amazon and Walmart in the past have advocated for some kind of National Standardization of Sale Taxes but that largely has gone no where as many states make up the majority of their revenue from 2 places, Property Taxes and Sales Taxes where the majority of Income Taxes go to the Federal Government
>>I wonder if states report what percentage of sales tax comes from businesses vs individuals.
Most states do have detailed reports of where sales taxes come from, in my state over 70% of sales taxes come from the sale of Automobiles as an example
Taxes are computed at the cashier because tax rates vary from state to state and city to city. If sales taxes were uniform then we would see more advertised prices including tax.
One exception is in advertised gasoline prices, which usually include all the taxes, including sales tax and special gasoline taxes.
At a gas station, they have between one and four prices (diesel, regular, premium, and premium plus, or whatever your station calls it). So it’s easy for them to adjust those four numbers. At a grocery store selling thousands or tens of thousands of items, it’s a huge task to set the price tag for each item. So instead (or so I’ve heard), prices tags are produced by the grocery store’s corporate office. This would be much more difficult to do if the price had to vary from town to town. Suppose this grocery store chain has a hundred stores. Instead of making ten thousand tags 100 times, you have to make 10 million tags entirely uniquely. This is even more difficult for things like clothes where the price is on a tag physically attached to the garment. Imagine if the sales tax went down in that town; every single article of clothing would need to be relabeled.
The price tags come on a 8.5x11 sheet, just like address labels. A stack arrives (monthly? Weekly? Not sure) from corporate in an envelope. I'm not sure what happens when the tag gets lost; fortunately those are usually the handwritten signs falling into carts. Price tags really should just be printed at the store.
I doubt if most price tags last more than a month at clothing stores, maybe a year at grocery/other large chain stores. Department stores and trendy fashion stores have too many sales and don't keep the same items in stock year round anyways.
It makes it impossible to do mass marketing with prices. Best Buy can send a flyer saying "Xbox One Only 199.99!" to everyone in Illinois. But if they had to include tax, it would be 219.99 or 214.99 depending on which side of my town you live in because they tax rate changes.
The biggest reason is that sales tax can be applied at the state level, then a county can add a bit more, and a city a bit more still. So for a national chain it's impossible to know the final price to put on an item until the consumer gets to the checkout register.
> Just pass a law that requires fair advertising of the actual amount the purchaser will pay, taxes etc. included.
"Just" anything in America is as OP pointed out an absolute nightmare left-vs-right debacle.
The "left" wants to have inclusive pricing for, as you point out, convenience and sanity while politicians on the "right" want to have taxes appended afterwards so that you are smacked in the face with how much the government is wasting your money every time you buy anything.
Absolutely not, I want to see the practice end on Gas Pumps.
Every business should be requried to adversite, print, and clearly mark the amount of the tansaction is going to taxation
Hiding taxation in the purchase price allows government to increase those tax rights with out facing the same amount of public back lash as they do when the taxation is calculated secretly from the transaction or advertised rate
This is why when come taxes increase their gas takes the hate and vitriol is directed at the "evil gas companies" increasing the rates when in reality it was a increase in gas taxation that cause the per gallon price to increase
One of the primary reasons I oppose a VAT style tax in the US is the vert nature of non-transparent taxation. People need to know exactly how much money the government is taken from them in any given transaction
In every single transaction? Why if there were some form you sent in and recieved every year that contain exactly the financial transation for that year between you and the state.. hmm.
Personally I think we need to do away with automatic tax holdings in general
People should have to actively hand over money to the government, see the money in their account, and then see it removed for the exact purpose of government taxation
This is the only way to hold government to account for their massive overspending, which today is abstracted away to the point that people believe their tax refund check is the "government paying me money" instead of what is really is, the government taking to much money from you and then giving you back what they over seized
Any abstraction in government funding is a negative for government accountability
If people had to physcially spend a payment larger than their mortgage every month to the government they would quickly start to ask "Why I am paying so much" and "what am i actually getting for this money"
Instead the government slyly takes the money before people even realize they had it, sure they get a pay stub but it is not "real money" that was ever in their physical possession, most people do not even look at their Gross income only the amount physically put into their bank account.
This subtle difference is factored into how government has structured taxation to ensure very limited accountability
Yeah like these do not have to be separate things. If I advertise a final price to you, "you will pay $4.95 for this thing," I can still communicate on the receipt that $0.50 of that went to sales tax, and if you are paying in a way that excludes taxes from being collected, e.g. SNAP benefits, there is no reason that you can't be charged only $4.45 for that because the tax is deducted from the advertised purchase price. If you are concerned about benefits that are "use 'em or lose 'em" you can always remit the tax to the person as physical cash so that there is transparency there. This is just a pareto inefficiency; there appears to be a way to make some folks better off without making any other folks worse off.
It's not merely "practice" in Canada, it's the law. And since most transactions are handled by software these days, it's pretty easy to implement and verify (jobs: secret shoppers). Subtler, businesses can try to game their prices to maximize rounding gains; also illegal (jobs: accounting, data analysis). For small businesses with antiquated tills, one should offer grants for upgrades and training (jobs: installation, manufacturing, tech support...).
> Subtler, businesses can try to game their prices to maximize rounding gains; also illegal (jobs: accounting, data analysis).
It's actually illegal there to set prices such that they will generally round in the business's favor? Talk about micromanaging…
If they change the tax rates do you have to update your prices so that they round evenly again?
A fairer policy might be "round random" (e.g. 1.23 rounds to 1.20 40% of the time and to 1.25 60% of the time, since .23 is 60% of the way from .20 to .25). That would be harder to game by manipulating the prices. However, you would need to certify that the rounding was actually random; the result wouldn't be obviously correct for any particular transaction, only in aggregate.
Everyone uses an electronic POS system and it will round however the manufacturer told it to round (which will be correctly). The only people you have to worry about cheating you out of 3-4 cents in a world without pennies (the maximum you can be cheated) would be people without electronic systems. Which is to say, no one.
I mostly meant that I don't have any faith that the code will work correctly. I'm not even assuming malice. There are all kinds of super simple rounding mistakes you could make that would mess up the rounding. Especially if you're writing for a market that you're not part of (eg, out-sourced coders living in one country, but writing POS code that is deployed in another country).
That said, do I think that someone, somewhere, has/does/will out of malice abuse this specific oft-ignored dark corner of the marketplace, for personal gain? Yeah, I absolutely think that:
I just disagree with this. We will see Wal-Mart and other chain retailers make their own POS software/systems.
3-4 cents isn't a lot. Unless it's added up by all of the people shopping in those places over the course of a year. The incentive to cheat the system is there, therefore the system will 100% be cheated. That's The American Way, in my experience.
Wal-Mart is also a huge corporation and every single attorney general, not to mention the FTC, would be delighted to learn that they're so clearly and unambiguously violating the law...
This kind of fraud would be so easy to detect I just can't see it occurring on any large scale. The problem would be with small "mom and pop" businesses that could do it for some time without being noticed.
So do you believe they are already screwing you out of fractional cents? There is already rounding going on, there's no guarantee that applying taxes yields a whole number of cents.
Honestly, all folks would have to do is get a receipt that shows how much tax you paid.
And even if they do always round up: It won't be that much - up to 4 cents per transaction. 125 transactions would only cost you $5 per month - and besides, businesses have actual costs to using cash. No pennies means less time handing out and counting change and less change to get from the bank. Not to mention the savings at the government level.
Very interesting to check out how different POS systems handle the rounding!
I share GP's assumption, assuming that businesses would re-price based on the final cost. There is a financial incentive to get the transaction to round up, and financial incentives are usually pretty motivating.
(Given the max incentive is 5 cents per transaction, I might guess a focus on one-off transactions like a bag of chips, vs. the complexity of attempting to get the average grocery bill to end in the right #!)
Would be interesting to see if the after-tax prices of potential single items (chips, water, pop) changed with this rule. Anything that was 99 cents, now that HST is 13%, comes to 111.8 cents, rounds to 110 cents. Bumping that to 100 cents even, rounds to 113, rounds up to 115. Profit of 5 cents on '99c/1$' item for 5% difference. Hard margins to give up!
That would probably be illegal in most jurisdictions in the US.
I don't understand the big fuss over rounding in the discussion of eliminating the penny. Rounding happens. We already round sales tax up or down to the nearest penny--this would just round up or down to the nearest nickel.
But while we are on the subject, I think we should eliminate nickels and quarters at the same time as the penny and just round to the nearest dime. (Let's put the 50 cent piece of of its misery while we are at it too--just dollars and dimes). Rounding to the nearest ten cents is plenty specific enough given the accumulated inflation/devaluation of currency over the years and you basically get to simply knock off one decimal digit of precision for each transaction which makes things more straightforward. Also, US dimes are small and lightweight, making them easy to carry relative to other coins.
> Let's put the 50 cent piece of of its misery while we are at it too--just dollars and dimes
You forgot quarters, which are perhaps the most common coin.
How about we eliminate pennies, nickles, dimes, half-dollars, and dollar bills, and just use quarters and dollars?
Making change would require an average of 4.5 dimes, with a maximum of 9 that happens 10% of the time. Currently 9 coins are required only for 99 and 94 cents. (That's without half dollars, if you use them then it's only 8). If you have dimes and half dollars, it's an average of 2.5 and a max of 5.
Also, US dimes are small and lightweight
I find them to be too small. I like the simplicity of removing a decimal place, but I'd prefer penny-sized dimes and quarter-sized half dollars.
I was going to say, imagine no more sorting coins since we'd only have one kind - but then I realized I never do that anyway, the Coinstar machine does it for me.
And if you get a gift card instead of cash it's typically free. I did that and walked away with an 80$ Starbucks card. The other time, the machine had an issue connecting and a normal checkout clerk gave me cash directly, again no fee.
I've never understood why people use coinstar. I take a jar of coins to the bank and if I have an account with them, they throw it in their big coin counter and do it for free. Is this not a common service banks provide? I've only banked with a couple of banks (I'm in Wisconsin, USA) but they both do this.
Yes, but then I'd have to go to the bank just for that. The Coinstar machines are conveniently located in grocery stores and big box stores. And as dlhavema said, if you get your money as a gift card, it's free. Different Coinstar machines have different cards, but they all seem to have Amazon or Walmart.
>> $0.01-$0.02 per transaction * millions of transactions per day has got to make some accountants happy.
You'd think, but actually no. That's because it's per transaction, so the accumulated amount is well pennies compared to the turnover.
For example, say you always rounded in favor of the company. That means an average of 2c gain per transaction. If you do 2 million transactions a day that's... 40 grand! yay. Except that if the average transaction is say $50 (which seems kinda low) that means your turnover for the day was $100 million.
So, in short, if you are making a lot from the rounding error, well you're making a lot lot from the actual sales.
Single turnip is ridiculous sure but that is hardly the average sub 5 $ purchase. I have seen people check out with single pieces of fruit or like a gallon of milk regularly. Plus, in my state, you could easily get a single deli item for lunch or breakfast for ~5$ or under. Basket size (which is the term groceries use for the average purchase total) is about 50$ although it has gone up in covid19 times. That is the mean though- there is a ton of ~5$ and sub purchases
I work near a grocery store and quite a few people by a salad or a small snack for lunch. Some also quickly go and some small things that have run out, i.e. some milk, before heading home.
This might also be a currency difference, through; 5 Euro in Germany can get you quite far (at least outside of metropolitan areas).
I have seen people purchase a single Brussels sprout in order to use a coupon that requires 'any purchase' to get a free item. Getting two of the same item is more common, but having someone go back to find the smallest vegetable that exceeds the tare isn't unknown.
This is similar to how HFT firms make a profit. Except it's generally less than a penny but it's per share per transaction (trade). We can thank the Sub-Penny Pricing Rule of Regulation NMS for this feature. An order for 1000 shares of XYZ stock that is front-run for half a penny per share is $50 dollars profit. Rinse and repeat.
>We can thank the Sub-Penny Pricing Rule of Regulation NMS for this feature
Are you sure? I did a quick search and came up with this
>One of the rules in Regulation NMS is a new Sub-Penny Rule: “which establishes a uniform quoting increment of no less than one penny for quotations in NMS stocks equal to or greater than $1.00 per share to promote greater price transparency and consistency. . . . In particular, Rule 612 addresses the practice of “stepping ahead” of displayed limit orders by trivial amounts. It therefore should further encourage the display of limit orders and improve the depth and liquidity of trading in NMS stocks.”
which suggests the opposite of what you're claiming. Also, I'm not sure how you'd even make money this way, considering that NBBO requires brokers to execute their customer's trades at the best available price.
The NBBO ensures you get the best price available on public exchanges. Public exchanges are not the only places where stocks are traded.
If the best price of a stock on exchanges is $25.00, but an HFT can buy it at $24.99 on a dark pool, they could buy it cheaper and sell it to you, and pocket the difference. When they pay your broker for the privilege of doing so, it's called payment for order flow. As a retail trader you have no visibility or access to dark pools.
Aside from dark pools, NBBO updates have latency which may be exploited:
Not matter how they do it, the fact that they are willing to pay your broker to execute your order is proof that they have some way to make money from your orders.
Your criticism of my attributing the cause of the 'feature' to Reg NMS is fair. Although it is worth looking at the entirety of Rule 612, especially paragraph (c)[0].
You are correct that brokers are required to execute customer trades at the best available price aka the NBBO. The issue here is that the NBBO is relatively slow as compared to data feeds offered by various exchanges and many brokers use the NBBO simply to satisfy Reg NMS Rule 603(c)[1].
If price data was able to travel instantaneously then the NBBO might represent the true best price(s). But the laws of physics say it isn't so and orders can be executed at a less-than-best price yet still at or better than the NBBO.[2]
Fortunately, more are aware of this these days including the SEC which released a proposed order calling for exchanges to submit revised NMS Plans for consolidated data earlier this year.[3]
The rounding only happens on paper transactions. Since most transactions are made using plastic, where no rounding happens, the impact is terribly small.
You do realize you’re being guilty of exactly what you’re decrying in American politics? You’re over analyzing a minuscule impact that would result from a change to the status quo.
> This is a key difference between US policy & Canadian policy that I have informally noticed while growing up on the border (with family ties on both sides).
My wife's Canadian and I'm American, and we've discussed this point too. My theory is that Canada's parliamentary system generally puts one party in charge of the executive and legislative, so it's easier for that party to get things done. Of course there are times when a party in the US controls both branches and we still struggle to get things done. I would assume that most larger changes happens on this scenarios though.
And of course the US seems to suffer from partisanship in general more than Canada, but I can't back that up.
I've always thought of two factors in Canadian federal politics that make a huge difference operationally: Many political parties (diversity of platforms/views), and the vote of no confidence.
Canada generally has at least three official political parties (more than 12 seats in the house) at any given time. Currently there are four. You need the most seats but not necessarily a majority of seats to form a government. If a party has fewer than 50%, they form what's called a minority government.
Next big piece is the motion of no confidence, which means we can have an election literally whenever if a government can't pass legislation.
So combine the chance of minority governments and more voices and platforms in government the possibility that obstruction can actually cause you to, you know, lose your job, and you get natural checks against a lot of the problems on display in American federal politics right now. If you can't pass a budget, you don't get a federal shutdown until you negotiate one, you get an election triggered immediately. I understand why no confidence would be practically impossible in America due to money and insanely long election cycles, but it really helps form coalitions and collaboration in Canadian politics.
> If a party has fewer than 50%, they form what's called a minority government.
No, that's when a political party _or_ a coalition of parties does not have the majority. Netherlands often/always has a coalition / combination of parties. They're never considered a minority government unless the combination is <50%.
I don't think that's the case myself. While I do think that the parliamentary system is better than the congressional system, I think it's more that the parliamentary system emphasises consensus-building and executive accountability more. This is especially apparent in countries where a form of proportional representation is used for elections.
What you're leaving out, in Canada's case, is that the norm is a strict party-line vote. In rare cases, the PM will allow a "conscience vote", where individuals vote as they will; in every other case, you vote as your party directs or you're kicked out of the party. As party-line voting is the norm, sitting as an independent is basically worthless in terms of accomplishing anything--no access to party resources or assignments.
So in practice, the PM of a majority gov't (i.e., has a majority of seats) gets to pass whatever they want to pass; the saving grace of this is that, without having to haggle and herd cats and trade horses, the legislation is the legislation--there's no poison pills, no payoff amendments, no loopholes to capture one person's support, and no extreme bits to trade away. It's just "this is the law we want", which I think leads to higher quality legislation over all.
The PM of a minority gov't (i.e., only has a plurality of seats) may have to secure another party's vote to pass, but that's a negotiation with a second entity, not a hundred other voting entities.
Consensus doesn't play a significant part in it, I believe. Within the bounds of the law, the PM of a majority is nearly a polite dictator.
This all very true but I just wanted to add one more thing I think is a strength of parliaments.
In a parliament majority, the buck stops with the Prime Minister and win or lose his performance is on the line in the next election. There's no (effective) hand-waving about opposition or other excuses to deflect accountability. Elections are a black/white referendum of the incumbent's performance.
In the US it's a lot easier to muddy the waters and a lot harder for people to arrive at a clear conclusion and often nobody is happy.
"YES I don't like X BUT it wasn't Y's fault it was Z"
I agree with this, and I would further add that "confidence votes", where if the vote fails, the gov't falls, are another valuable safety hatch. Budgetary votes are always confidence votes, but anyone can move for a vote of no-confidence if they have the votes. With a majority gov't, this is hard to do unless the majority is slim and a couple people are sick (or "cross the aisle", switching parties), but with minority gov'ts it's a significant risk--the PM can't afford to alienate a large enough number of MPs to falll to a confidence vote, which is literally a ten-minute affair if it occurs. US politics has nothing of this effectiveness.
Consensus building? If a party in Canada gets a majority in Parliament, they can pass whatever bills they want (the senate rarely intervenes unless it's really controversial). And individual MPs have much less leeway to stray from the party line.
The US system is much more adversarial. Even if a single party gets the house, senate and presidency, there isn't much stopping individual party members from voting against the party line.
It's true consensus is need with a coalition/minority government, but they don't seem to happen that often. Yes, I know there is one right now.
> This is especially apparent in countries where a form of proportional representation is used for elections.
Proportional representation is almost a necessary condition for the parliamentary system to encourage consensus-building. More specifically, it's necessary that no party hold an absolute majority.
With first-past-the-post, you usually end up with one party having full control for one term, and no one to hold them accountable (particularly if you have the principle of parliamentary soverignity).
That assumes members of the legislature always vote with their own party, which they don't. Plus, there are usually two houses and the upper house can scrutinize and hold to account the lower house. In the UK it's an appointed (and partially hereditary) upper house, so there's less party discipline (although not none).
Well, that's _part_ of why, but the fundamental reason is that NI is the rump of the Kingdom of Ireland within the UK, which, like Scotland, preserved a separate legal system even after political union with the UK brought about through the 1800 Act of Union.
[Aside: An interesting consequence of this is that England lacks a legal and political identity separate from the UK as the UK is an _extension_ of the Kingdom of England. Another interesting this is that even though it was part of the Kingdom of England, Wales _does_ have a legal and political identity because there are acts of parliament that _explicitly_ refer to it. The UK is a constitutionally odd country.]
We seriously have to take a look at how parliamentary systems work. I remember our political science teacher told us that the only country where the presidential system actually works is the US. That was 20 years ago. I think that is no longer true.
> Of course there are times when a party in the US controls both branches and we still struggle to get things done.
It's the party discipline. In Canada political parties control the fundraising apparatus and you can't be bankrolled by a handful of wealthy donors. Barring unusual circumstance, if you want to be re-elected you are beholden to a party and thus the whips generally have a strong ability to bring votes to the table.
In the states its a lot easier for a Republican or Democrat to tell their party to go fly a kite if they don't see voting for a bill as opportune, in part because of less reliance on the party.
As someone who has lived on both sides of the border, my theory is that Canadians are just less politically active. I can remember major bills coming for vote and sure, you'd see a few news articles, but rarely did it become entrenched in daily discussion.
I actually liked the US approach when I first arrived - "how great! everyone is passionate about politics!". I find it somewhat draining now. There is almost no part of life (work, friends, random strangers) where politics doesn't come up.
I wonder why my immigrant friends get so passionate about American politics. I find it mostly boring.
I think you’re not describing real political passion or engagement, though — Americans can get quite worked up about politics but we’re not all that engaged, or passionate enough to lobby for real change. Politics serve as signs of tribal affiliation and self-identity, and sometimes as a way to bludgeon other people. In that sense talking about politics is similar to, and as pointless as, arguing about sports. We (Americans) actually don’t show much real engagement if you look at voter turnout.
I found it interested because so little of it happened in Canada. But yes, I mistook it for real political involvement, but you're right, it's mostly banter. That said, I would say more Americans are at least aware of the political issue of the day, where in Canada many people just didn't care.
My other pet theory is that Canadians get more than enough politics from Canadian coverage of US politics (it's often 30%+ of news coverage) so they feel little urge to do the same with domestic politics.
The problem with checks and balances is that partisanship is paralyzing. If each side deems their causes good and the opponent evil that must be stopped, nothing happens. Some mechanism is required to build cooperation. Patriotism used to serve that role in the US but it’s not functioning since it too is becoming political.
I used to think so, but as I read more about the founding fathers I’m beginning to think they had all the same personality conflicts we have today. Maybe there’s a case that with today’s media our current reps are more accountable to their constituents, but (superficially at least) most would interpret that as a good thing
Disclaimer: this is just my view as a Canadian, not sure if studies back this up.
I think it's a feature. We seem to move a lot faster and it doesn't always work, but for the most part, having MPs as the executive branch allows people at the top to legislate what they need to succeed.
> On the other, malevolent change can be stymied indefinitely
When the party that made the "malevolent" change is kicked out, then whatever they did can be reverted very easily.
Contrast that with: if passing anything is hard, and a "malevolent" change does manage to be rammed through somehow (e.g., one party controls things for a two-year period), then reversing it will also be very difficult.
I'm not wholly convinced the first statement is the case. It's probably true for some types of changes like Executive Orders than can be easily repealed. Others, like laws and judge selections, take much longer to revert. I wonder if this is due to the lobbying culture in combination to competing interests.
Somewhat humorous example: In response to the need for warm clothing in the Korean War, US lawmakers instituted an alpaca subsidy in 1952. This subsidy remained in place for over 40 years.[1]
I do think there’s evidence that your second statement is true. Bad policy takes a lot of political will to overturn.
Correct, but as stated in the parent I was asking specifically about the characteristics of the US system.
I personally think it was deliberately put intended as a check/balance. Af the far end of spectrum, the most “efficient” form of government is a dictatorship. I’m not sure if what the US has is the correct balance, though.
You're missing the obvious way to exploit this: all consumers stand to benefit a maximum of two cents from each purchase they make by carrying both cash AND card. Since rounding only happens when paying cash, simply pay cash if the purchase could be rounded down ($_._1 or $_._2), and pay card if it could rounded up ($_._3 and $_._4).
In practice, no one gives a shit because it's a penny and no one cares about the penny. QED
I live here in Ontario, and you're right the sky did not fall. The rounding isn't a big deal really, even on scale. It rounds to the nearest nickel, which is or is not in favour of the consumer/business. For example, $2.07 rounds to $2.05, while $2.08 rounds to $2.10. This should net out to an immaterial benefit to either side. It also is only rounded when paying cash. Card transactions are not rounded.
The correct way to change your sales-tax structure is simply to require stores quote the tax-included prices of things (like every other freaking country). It's not hard, and since businesses basically pick 'nice' values for prices, they just keep doing it.
"Side note: If you drop the penny, for the love of $diety change your sales tax structure so that it's a multiple of 5. 5%, 10%, 15%, etc."
I don't think you thought that through. Unless you are going to require prices be rounded to the nearest dollar, you still need pennies or even fractional pennies to accurately pay the tax. 15% of 75 cents is 11.25 cents, for instance.
I think what you do is that the government publishes a table of official roundoff values, so 15% of 75 cents becomes a thing that you look up in a table.
The last state I lived in where I looked closely at the sales tax structure had a table like this for which penny to round up or down to. It eliminated all formulas and ambiguity.
Another thing to remember about Canada is that we don't use cash as much as the US. Cash accounts for less than half (44%), by volume, of transactions in Canada. I'm not sure what the split between Interac (direct debit from your bank account) and credit cards is, but the mechanics of the transaction are almost identical - Interac prompts you for an account to pay from, both prompt for your PIN.
When you pay for something electronically, the rounding rules don't apply. If my bill comes to $10.42, I can save two cents by paying cash thanks to the rounding rules. But if it comes to $10.98, I save two cents by paying electronically.
> Anecdotally I haven’t carried cash around in years.
Generally I keep a $40 in the wallet just in case there is a cash-only situation, but that's literally just a backup -- 99% of transactions are on some kind of card.
>Sayre's law states, in a formulation quoted by Charles Philip Issawi: "In any dispute the intensity of feeling is inversely proportional to the value of the issues at stake." By way of corollary, it adds: "That is why academic politics are so bitter." Sayre's law is named after Wallace Stanley Sayre (1905–1972), U.S. political scientist and professor at Columbia University.
I feel like we missed an opportunity to also drop the nickel and round everything to 10 cent intervals and just forget about the extra level of precision entirely.
I know that it would be a bridge too far, but having worked at a business (movie theater) that had prices only ending in 0.25, 0.50, 0.75, or .00, I would love for the whole country to just have quarters and be done with it.
Though, since I rarely handle change at all — if I do use cash, I usually find the first place near my hand to donate whatever metal comes back to me - I suppose I’m not the target audience anyway.
Quarters are too ingrained into things to get rid of them. So many things take quarters. And your base unit coin needs to be divisible by the rest. So we can't get rid of the nickel without also eliminating the dime... because we aren't replacing quarters.
Did you ever noticed that gas is priced down to the mill even though those coins haven't circulated in a long time? Most people don't even know what they are.
I think it would be a fine to drop the penny and nickel from circulation, just let it become an obscure unit.
I'm totally with us ditching the penny, but I really wish we had a paper (plastic) $1. Any time you break a $5 bill you're left with a pocket full of change!
"Us" in this case is Canada, and we've had polymer notes for years. And it's not at all unusual for people to still call it "paper money" because it had been paper for so very long. Heck, we still call the stuff we use to wrap and protect things "tin foil" even though it's been aluminum for my entire life (and new consumer electronics were still being made with vacuum tubes/thermionic valves, with tube testers in every hardware and drug store, when I was a kid).
American currency isn't paper. It's more akin to cloth than anything else. And you can go swimming with 300 in bills in the USA. They are not going to melt and will be just fine even if submerged for hours.
There are absolutely better materials to use, no argument there. But US paper currency are not even close to being fragile.
It's paper. It just happens to be a cotton/linen long-fibre pulp blend rather than, say, wood pulp. That's how most paper was made from the origins of the stuff, in the West at least; wood pulp and so forth are relatively new in the grand scheme of things.
I thought the same thing when Canada made the switch, but soon found out that while tracking down a hold paper $100 is a bit frustrating at times the added opulence from destroying something that will never be replaced brings my cigar experience to the next level.
At least in the US, bills are much different from regular printer paper, closer to fabric. As long as you're not taking them for a swim regularly, they should be fine. (That said, when I've lived in Germany, I very much enjoyed the existence of €1 and €2 coins -- I've written about it on here before, if you're willing to scroll very far back in my post history).
>I very much enjoyed the existence of €1 and €2 coins
Uggh. When I travel in Europe--especially Germany with its remaining heavy use of cash--I hate coinage that is sufficiently valuable that I can't just basically ignore it. The US seriously tried to do a dollar coin (the Susan B. Anthony)--which was arguably ill-conceived for at least a couple of reasons but I'm very happy with US coinage being basically loose change although I'd be happy to eliminate basically disposable pennies and maybe even nickels.
Though to tell the truth I normally use cash so seldom and/or at so few places in the US that it probably doesn't matter.
I forgot about the Sacagawea dollar which did solve the fact that the Susan B Anthony coins were too much like quarters. Haven't seen one in the wild for years though. I didn't even know the other two but they're apparently not in general circulation.
Vending machines in post offices were the only place I regularly received dollar coins. Since most other vending machines accepted them, I never had much trouble using them up. The post office has removed most vending machines now so pretty much the only way I'd ever end up with a dollar coin would be if I bought a roll from my bank.
Swiss-money is recycled plastic+paper, i even going to dive with 300sFr in my pocket, lots of hipster-micro-breweries down there...but crackers are not allowed.
> Side note: If you drop the penny, for the love of $diety change your sales tax structure so that it's a multiple of 5. 5%, 10%, 15%, etc... Since Canada changed but left the taxes the same (14% in Ontario IIRC) there seems to be a lot of rounding-off in favour of companies instead of consumers. $0.01-$0.02 per transaction * millions of transactions per day has got to make some accountants happy.
This 100%. Quebec is the worst - 9.975%! Why oh why. It is so much simpler to have reasonable change in alberta.
Quebec went to 9.975 because they used to have "stacked" taxes, where you would charge GST first, then charge QST on the combined total as a second step. (yes, they QST taxed the GST) A few years back they went to a "sane" system of only charging GST and QST on the base amount, however they didn't want to lose money so they adjusted QST to 9.975 so the final tax collected would be the same as before.
The difference is that the Canadian Federal government is extremely powerful and the provinces have very little power.
In the US, the States are very powerful and the Federal government is much weaker comparatively. For anything to be done collectively across the entire US, it requires cooperation from all states, otherwise one of them can screw everything up. That inherently means more talking, more coordination, more meetings, etc.
It's the fundamental difference in how each country was forme and the system that they pursued. In some ways it's better and in some ways its worse. That's why you can have very powerful states like California dictate a lot of their own destiny, but then when it comes time for a national crisis like a pandemic, everything is fucked because the US Federal government doesn't have the same level of control and power as in Canada. In Canada you didn't get the inane policy of each province buying its own PPE like in the States, driving up prices because they are all fighting each other.
I don't get it, provinces are very powerful here in Canada. It's very hard for the federal government to go against the big provinces. Angering Quebec or Ontario is a recipe for disaster. Btw provinces definitely bought their own PPE too, most provinces have total control over their healthcare system and their public health policies. There's no expectation from the canadian public to see the Federal government intervene in that regard either. If anything, I'd argue the canadian Federal system is much more decentralized than America's.
In canada, health care is the sole responsibility of the province. The federal government helps with planning and coordination (and maybe funding) You didnt get the insanity because the individial provinces are mostly sane. You still saw individual differences, especially look at ontario's early response.
Minor nitpick, just so people reading get more complete information on your example.
Very few states maintained their supply of medical equipment properly. Likewise, the federal government hasn't restocked much equipment since the early? Obama administration. Unfortunately, it just wasn't made much of a priority. Of course this failure was made even more devastating due to massive global misinformation leading to late decisions and poor communication by entities that should have been more trustworthy and better equipped.
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With that said, the states rights debate is a tough nut to crack. There's been so many instances of (various) governments doing evil things that I'm not sure I'd want to centralize even more power.
It's an extreme example, but I liken it to letting a Mao or Hitler take complete control for the benefit of a better healthcare system. The cost is just too great.
>Canada stopped producing pennies in the fall of 2012. [0] The sky didn't fall.
True, but part of me still misses it. Not for any real functional reasons. The rounding issue is really nothing and seems to work out pretty evenly from what I can tell, not that I've really bothered to try and figure it out.
I guess it's more sentimental reasons really. It feels odd not being able to count cash to an exact cent. You can now only hold cash up to the nearest 5¢, again not a big deal, but it just makes cash feel more second class. Then there's things like those fountains people would toss pennies into, or the whole find a penny pass it on for good luck thing, or the various phrases involving pennies. 'A penny for your thoughts and such'. These are all things that'll kind of vanish from public thought.
I dunno, these are just some things i've thought of over the years since they got rid of pennies.
Penny rounding was supposed to balance out, with 0.01 and 0.02 rounding down to 0.00 and 0.03 and 0.04 rounding up to 0.05. In theory it balances out. I don't think even adjusting your prices to get "in my favour" rounding would make that much of a difference as it's on the final total, not per item.
I wish they had dropped nickels at the same time. We could have lost one digit in the currency and kept numbers round. I just throw out nickels when I encounter them.
When Australia ditched the 1 and 2 cent coins, making 5 cents the smallest denomination, the rules were that transactions ending in 1, 2, 6 or 7 were to be rounded down to 0 or 5, respectively, and that 3, 4, 8 or 9 were rounded up, and that this was to be done at the _transaction_, not the _item_ level.
Several companies and utilities had to be reprimanded or fined due to doing it per item.
>Canadian government: We think it's a good idea, so we're going to do it.
I think that is primarily a function of having three rather than two major political parties. With three parties, any party that can be on the other side of a controversial issue from the other two tends to win the argument. Hence, we're a lot more biased for action at the government level.
The rounding takes place at the point of sale, after tax is calculated. Receipts still list the un-rounded price, and tax is also paid on the un-rounded price. So to the government, it's as is if no rounding is taking place.
>There was resistance when Canada dropped the $1 bill in favour of a Loonie (a $1 coin with the image of a loon on it). People bitched about having too much change in there pocket, pockets became too heavy, etc. I do however see more coins in tip & donation jars now then I ever saw paper money.
Sounds like you know why that is, because people don't want to be stuck carrying around big coins.
>Side note: If you drop the penny, for the love of $diety change your sales tax structure so that it's a multiple of 5. 5%, 10%, 15%, etc... Since Canada changed but left the taxes the same (14% in Ontario IIRC) there seems to be a lot of rounding-off in favour of companies instead of consumers. $0.01-$0.02 per transaction * millions of transactions per day has got to make some accountants happy.
Over the billions of dollars spent in a state per quarter, you are either seriously screwing consumers, or seriously reducing state government revenue. I'd really hate my 6% sales tax to be raised to 10% so that we could kill a coin I don't even use (last paid cash probably a year ago).
This is (very) mildly stimulative/inflationary, and in the time leading up to en expected re-basing, accelerates the phase-out of the 1¢ penny (as people hoard in expectation of a 5x return). But as of the moment of re-basing, it flushes all those penny-jars out into spending/circulation.
Congress could do this tomorrow, effective immediately or in a week or month. Maybe the Treasury Department/Administration could do it on their own authority.
(The only significant opposition is likely to be from suppliers of nickel-minting metals. So maybe we just rebase pennies as 10¢.)
I do think enough people believing this could happen, and thus hoarding pennies, could increase its likelihood.
It'd grow a popular constituency for the rebasing, and create a change shortage that's most-easily addressed by incentivizing the release of instantly-more-valuable penny hoards.
Fill your jars, then pass the idea on!
(Does anyone know someone high up in this '4chan' memetic-prankster cooperative I keep hearing about? Nah, they'd probably just trick Congress into doing something useless like rebasing the penny to 4¢.)
They also say, 'Liberty', 'In God We Trust', & 'E Pluribus Unum'. Lots of writing on government-issued materials is false, ceremonial, outdated, or overridden by later acts.
If it really bothers you, you can file that off your pennies before spending them at 5¢ value. We won't mind.
The $2 bills are currency. He recombines them to create funny & thought-provoking situations, including encounters with local police & Secret Service, that test the boundaries of what's allowed & what's trusted.
Unless you are committing fraud, like falsely trying to claim it has a value other than what it actually does, defacing currency isn't illegal. So trying to pass off a penny as being worth 5 cents today by filing it down would violate that law, but if they really were worth 5 cents, it would be fine.
This is the only sensible solution. I don't know of a single thing that I could buy with a nickel, let alone a penny. I think there is some candy that's still sold for a dime, so having a penny worth that much would have at least some utility. The U.S. half-cent coin was withdrawn in 1857, when it was worth about $.15 today!
how about rebasing the dollar to $10 so that the penny has the worth of 10¢, and then apply a one-time progressive wealth tax to pay for saving the economy from collapse while also addressing the regressiveness of that action? maybe call it an anti-revolution tax.
As an American living in Canada, I gotta say. Pennies and dollar bills SUCK. We have $1 and $2 coins and they're actually useful. Every time I visit home, I end up with piles of pennies and wads of stinky, tattered, overcirculated garbage bills.
If you accumulate a pile $1 and $2 coins, nobody looks askance if you plunk down a stack of them. But god, the glares if you want to spend $20 in dollar bills.
I say take it further: nickels should go too, and probably dimes.
Exactly. When we retired the half-penny, it had a purchasing power that would equate to 10-15 cents today. Someone just needs to have the political will to do this. We should just have quarters and move dollar bills to coin only. So much cheaper to make and they last forever.
The reason we don't is that people hate change and politicians don't like to rock the boat. A lot of our issues today are not that we don't know how to solve problems, but that the politicians aren't willing to take them on.
This sounds a little bit like the politicians are not "we" but are imported from Mars or something.
The majority of people seems to like it this way, or rather doesn't care. There's even no vocal enough minority to demand the change (pun not intended).
It wasn't until I went to the UK in my late 20s that I realized how badly America needs coins in the dollar and two dollar denomination. Having spare coins with weight and mass rather than loose dollar bills helped me get a sense of how many loose singles I had, and being able to drop a couple coins on a counter to pay for cheap items (a bag of M&Ms, a cup of coffee) is somehow, I don't know how, but somehow more ergonomic.
Conversely I almost never carry change in the US and, on the increasingly rare occasions I use cash, I usually just bring the change home and dump it in a bucket. I don't want change that has any significant value.
The US actually has one dollar coins, and it's common for vending machines to spit them out as change. They're the exact same size as the Canadian loonie.
The ergonomics are a real selling point for me. Coins are certainly tidier than bills. They're low friction and hard, which makes them easy to stack, don't vanish in a puff of wind, they're easy to count...
We have a similar problem in the UK with Scottish bank notes. They're legal tender across the whole of the UK, but most shops in England have never seen them before.
Thanks for sharing these links. I think the second video was the most enlightening. Even the security guard had the insight to think "why would someone fake a $2 bill?".
About a year ago I tried giving a 1L bottle full of pennies to a homeless dude. He wouldn't take them. He was like "what am I gonna do with that shit?" I just left them on the sidewalk. They were still there a few hours later. True story.
It always feels weird to tip using only coins in Canada. No one has ever given me the stinkeye for doing it so I'm guessing it's fine but it still feels like I'm shorting them even when the coins are $1 or $2.
When someone posted an article about the coin shortage on Facebook recently, I realized that I haven't used cash for a purchase since sometime before the lockdown started. And even before that, my primary use of cash was the collections basket at church—which the lockdown has ended up transforming into a credit card transaction now. Our formerly cash transactions for our cleaning lady have converted into Zelle payments. Friends who also commented mentioned tipping delivery people although I prefer contactless delivery and always include the tip in the original payment rather than have to come close enough to a delivery person to hand off cash. Cash has long been on a decline and I think the pandemic is accelerating this to the point where it's going to end up being moot.
Coin-only laundry machines are probably the biggest drivers of persistent cash usage in most of my acquaintances' lives. I'm guessing that apartment buildings big enough to have in-building laundry rooms but small enough to not be able to justify a cashless payment system may just end up shifting to not charging for laundry.
Sample size of one incoming, but the building I live in only has 16 2-room apartments and has a app-driven option for the machines (they take coins, but there's no change machines and I've never seen anyone actually do so)
Until I made the (in hindsight, fortuitous) move into a house with a washing machine, I and many other millions of people in the US used cash weekly at the laundromat. Even their laundry service only took cash.
Additionally, the terms of use of credit card companies forbids charging a different price for cash versus card. This means that businesses which aren't large enough to negotiate different terms, have to raise prices across the board to cover the cost of credit card payments--even using cash, you're paying rent to the credit card companies.
If you're paying cash you're not paying anything to the credit card companies. What you are doing is subsidizing my rewards cash back by giving the merchant a slightly higher margin on your purchases so allowing them to charge slightly less on my credit card purchase. Or else you're just giving them extra money and that's the end of it.
> If you're paying cash you're not paying anything to the credit card companies. What you are doing is subsidizing my rewards cash back
Please think through how pedantic this "correction" would be even if the credit card company were charitably passing all their fees to you as cash back, which I assure you, they are not doing.
No, the point is that when you pay cash, you give more money to the merchant than I do. This enables the merchant to charge me less than they might if all their purchases were by credit card (although not necessarily—I remember reading somewhere that when Wendy's started accepting credit card payment, they saw their average purchase total go up. I know when I published a magazine, the percentage that I paid to the credit card processors for payments was worth the effort of not having to deal with paper checks—taking them to the bank for deposit, having the potential of getting hit with a fee if a check bounced, etc.), so your cash payment is subsidizing my convenience and cash back. The parent comment seemed to imply that the merchant paid a percentage to the credit card companies whether customers paid cash or credit.
But they don't all pay in cash: customer A pays cash, customer B pays with a card that gets 1% cash back, customer C pays with a card that doesn't get cash back. They all buy a $98 item at a retailer.
The credit card company charges 3% in fees, or ~$3 for each of the CC customers, so the retailer is now making $288. So they raise the price of the item to $100. Now all three customers are paying $100 each, the retailer is making $294 again, and the credit card company is making $6. Customer B has a card that gets 1% cash, so they receive $1. Now the net change is:
Now, the way I'm summarizing this situation, is customers A and C have each given $2 to the credit card company, and customer B has given $1 to the credit card company.
You're saying, customers A, B, and C have given $2 to the credit card company, and customer A (the one paying in cash) has given $1 to customer B (the one receiving cash back). That's technically not wrong--it's certainly a way to represent the cash flow that gets you to the same place--but it's a pedantic, inane difference, and it certainly isn't a "correction".
Maybe the simplest law to make it less of a shit deal for society is forbid the forbidding of charging different prices for cash vs card. Or something halfway, like forcing card companies to allow price differences up to x% of their charge.
> Maybe the simplest law to make it less of a shit deal for society is forbid the forbidding of charging different prices for cash vs card.
Agreed.
> Or something halfway, like forcing card companies to allow price differences up to x% of their charge.
If I want to use cash, why should I subsidize any portion of the credit card company? I don't see the logic of a half-measure.
I firmly believe that corporations (and other collectives) do not have rights, individuals have rights. This is a prime example where refusal to regulate corporations harms individuals.
The one- and two-cent coins were initially introduced in order to ensure that the introduction of the euro was not used as an excuse by retailers to heavily round up prices. However, due to the cost to business and the mints of maintaining a circulation of low value coins, Belgium, Finland, Ireland, Italy and the Netherlands round prices to the nearest five cents (Swedish rounding) for cash payments, producing only a handful of those coins for collectors rather than general circulation.[3] Despite this, the coins are still legal tender and produced outside these states, so if a customer with a two-cent coin minted elsewhere wishes to pay with it, they may.[4]
The Dutch Bank calculated it would save $36 million a year by not using the smaller coins. According to a Eurobarometer survey of EU citizens, 64% across the Eurozone want their removal with prices rounded; with over 70% in Belgium, Ireland, Italy, the Netherlands and Slovakia.
The claim that 0.01€ coins produced elsewhere remain legal tender in the rounding countries, does not hold for Finland. No supermarket is going to accept 1- or 2-cent coins for payment even if you had enough to add up to the nearest 5-cent unit.
That doesn't mean they aren't still legal tender in Finland (which they are). Somewhat relatedly, some places also don't accept all the banknotes – that is, the largest denominations – a rule which clearly has nothing to do with the rounding rules of cents.
It feels like the discussion of "legal tender" on this thread is based on how things work in the USA. In Finland, one can be compelled to pay all kinds of debts and obligations by bank transfer, and cash is not accepted. Even banks won’t take the 1- and 2-cent coins, and so these coins are de facto so marginalized that calling them "legal tender" misses the point.
About 10 years ago my friends and I made a Web site, removethepenny.com (no longer active) and starting calling around to see who would support us. I recall speaking to someone who was very angry that we cared so little for the metal industry.
I think this has been known for a long time but special interests have kept it on life support for obvious reasons.
Actually based on advertising around Washington, DC and the lobby groups that run those ads, there is plenty of money in the metal and paper industries to lobby both for and against coinage changes, because I have seen it the last time this issue came up. DC is so packed with lobbying firms that work on portfolios of every issue under the sun that you have to have lived and worked inside the beltway for a while to believe it.
That's a lot of money, but not "change public policy" levels of cash, either.
On the other side, handling pennies is expensive for businesses and banks, I bet it costs at least that much. There are special interests on both sides of this.
I'd imagine you also have to take into account all coin to cash machines that issue gift cards for change, and take decent percentages. They probably make several orders of magnitude more than the mineral companies.
If their profit margin is around 8% or so, which I assume would be reasonable for mining & industrial firms, that's a really small amount and not worth the lobbying cost
The melt value of a copper penny (1982 or prior) is worth more than the face value. However, it's illegal to melt down legal tender currency. AND, fun fact, it's illegal to leave the US with more than $5 worth of pennies, so you can't drive to Canada with a bag of pennies and melt them there.
So some people are now starting to hoard copper pennies, waiting for the day when pennies are no longer legal tender, and then...they'll make a modest profit, I guess.
The thing is melting it costs money too. Also most pennies have other metals mixed in for durability. Usually zinc. So to get the copper value you have to get those other metals out. That also costs money. Most places that recycle metals do not take pennies for melt value. They usually just do not want to mess with it. I would estimate it would have to be closer to 4-5 cents per penny before it would be profitable. But that is just a guess.
At some point us in the US will have to figure out how to cope with the issues our Democracy has with making changes and overcoming momentum. It seems our government is uniquely unsuited in this capacity in comparison to other modern democracies as seen with healthcare, income inequality, and the recent pandemic response.
I think the best approach is for the US to move more concerns to the state level. E.g., it would be great if states would start implementing their own universal healthcare for their residents.
States commonly have more internally aligned political goals and therefore can move quicker. It also has the benefit of allowing different states to experiment with different solutions and all states can learn from the results.
Lastly, inter-state mobility is much higher than inter-country and this will allow residents to congregate in a state that matches their political desires. E.g., if someone doesn't like the tax burden of states that provide more services then they can move to a state that provides fewer.
Trivial inter-state mobility is a big obstacle for states doing grand social programs individually.
If a state provided universal healthcare for residents, it'd quickly be overwhelmed with "hard cases" from other states where coverage is a problem. Which would drive up costs, and taxes, and drive productive/healthy people out.
See the current inter-state shipping of homeless people, especially those who suffer mental illness, that is often done via bus tickets paid for by local governments looking to shed those people.
Canada it is a "state"/provincial system. All provinces manage their own. Canada doesn't get inundated with Americans because if they do come, patients will be charged like private health care. If the patient's home province has universal health care, both province's will just work it out.
In general, we don't dump problems on to other provinces. It's bad form and federal courts will fix that quick especially with so much money on the line. If Florida state sends patients to a universal health care NY state for care, you can bet, NY State will be suing either residents of Florida for medical bills or Florida State directly.
The system here only works because the Canada Health Act requires every province to have a universal health insurer for provincial residents and mandates each province accept the insurance of the others. If only Ontario had a provincial insurer or the provinces didn't have to accept each other's programs there would be a ton of game theory style manipulation.
Any state trying to implement a single payer system would get crushed as tons of individuals and even other states tried to milk the system (like putting homeless people on a bus with a one way ticket).
States would need a "suicide pact" of sorts to ensure a bunch of states made the leap at the same time. There actually is such a plan to subvert the electoral college to ensure the popular vote winner always wins the presidency, but that's a relatively simple pact around single law. Health care laws a incredibly complex and rather than try some kind of weird multi-state pact you're better off fighting for a national law.
Americans going to Canada for care is a totally different thing, and not relevant to my prior point.
All of Canada has universal healthcare, which again makes Canada a completely different discussion from my earlier comment. There isn't the kind of huge discrepancy between provinces as we'd have if some US states had universal healthcare and some had the status quo.
To your argument about states suing one another - we literally already have localities giving mentally ill people bus tickets out of state, and that's been unable to be stopped via the court system. I'm not dealing in hypotheticals here, I'm talking about things that already happen.
> In general, we don't dump problems on to other provinces. It's bad form and federal courts will fix that quick especially with so much money on the line. If Florida state sends patients to a universal health care NY state for care, you can bet, NY State will be suing either residents of Florida for medical bills or Florida State directly.
That was kind of the point OP was trying to make - in the US there are quite a few states that would do this without blushing. Without the Federal government instituting a framework and legal mechanism to prevent it, there is no way any individual state can do it on their own.
it would be great if states would start implementing their own universal healthcare for their residents
This isn't really feasible because residents of one state with no universal healthcare + lower taxes could easily move to another state with universal healthcare + higher taxes when they get a serious illness.
You can have residency requirements. In Canada you have to be present in most provinces for half the year and live there for a certain amount of time before you get free health care.
Full benefits could phase in over time. You could get increasing discounts on public services until you reach full state membership. This would be no different than out of state school fees.
Durational-residence requirements still exists. E.g., paying in state vs. out of state tuition at a state university, which commonly requires a year of residency. [0, 1] State-provided healthcare could be provided in a similar fashion through state-administrated health insurance that has different rates for in state and out of state. There could be a durational-residence requirements for in state pricing.
"If the purpose of the requirements was to inhibit migration by needy persons into the state or to bar the entry of those who came from low-paying states to higher-paying ones in order to collect greater benefits, the Court said, the purpose was impermissible"
It's obviously hard to know for certain what SCOTUS will do, but under that standard it sounds like having health care benefits only available to long term residents would be on very shaky legal ground.
The trivial solution is to tie residency to property ownership or property lease, and payment of property tax. Then use the prop tax to pay for the health care, because almost all health care is local anyway. Have the hospital or clinic or whatever bill the municipal taxing authority wherever you live; for most people the house you live in.
Determining residency is not rocket surgery; could steal the entire system from state income tax codes.
Just another example of the failures of the Constitution in the modern era. The Federal government is the only one that can reasonably do Universal Healthcare, or any kind of economic stimulus in crisis, but it fails. States are powerless to try to fix it on their own.
I really like it that they offer you, instead of a site with a lot of junk and JS, a plain text version! That's much nicer news than the story itself :-)
... that said - why _don't_ you guys cancel the penny?
> Penny defenders' strongest argument was that eliminating it would hurt consumers. All those $9.99 products? The prices would be jacked up to an even $10!
That sounds like an argument made up retroactively to try to justify something. Seriously?
1. The time and effort to handle penny change costs more.
2. Those bargain prices will become $9.95 , and some other prices will rise slightly to compensate; or not.
Where I'm from, shops started using .95 pricing _long_ before the idea of scrapping 1c and 2c coins was raised, purely because handling those coins wasn't worth it.
A key difference is that we have VAT, which is built into the price, rather than a US-style sales tax, which is not. In the US, if you're handling cash you still have to deal with 1c and 2c coins because of that. That made it easier for us to scrap 1c and 2c coins, but creates resistance for any US attempts to do the same.
Applying rounding was entirely voluntary, and all the Government did was gradually take the 1c and 2c coins out of circulation. After that, it was a matter of time for the problem to go away.
> if you're handling cash you still have to deal with 1c and 2c coins because of that.
I don't think so. The same way you don't have to handle sub-1-penny tax amounts, you won't have to handle sub-nickle tax amounts later. There'll be some sort of rounding mechanism just like you described.
Well, yes. That's why I mentioned the rounding mechanism later. However, US-style sales taxes make the process of applying that more difficult because you can end up with weird numbers, whereas with VAT, you can pre-round things to minimise the disruption.
> That sounds like an argument made up retroactively to try to justify something. Seriously?
If the latest console game rises from $79.99 to $80.00 it's a trivial increase, I agree. A hundredth of a percentage point.
But if a loaf of bread rises from $0.99 to $1.00 it's increased by an entire 1% - resulting in a noticeable impact on food price inflation. And when your inflation rate is around 0%-2% before, even a quarter of a percentage point is pretty noticeable to inflation-watchers.
"Practical reality" hasn't changed. There never was a way to pay anything with a fraction of a penny, even when cards made it theoretically possible. The final price just gets adjusted to a whole penny amount.
I remember reading years ago that the reluctance to get rid of a penny is usual the unease in the central bank of a particular country to accept that the currency has inflated.
I imagine retailers would still price things at £9.95 instead to perpetuate the 'psychological trick' that "it's not really £10!".
I come from France, where we use pennies and live in the Netherlands where we don't.
It's always a great deal of fun seeing the family come over and try to hand over / or wait for their pennies after doing the groceries; struggling to really understand each other because of the language barrier.
You should be able to pay with 1 and 2 cent coins in The Netherlands. You just won't get them as change and the amount charged will be rounded to the nearest 5 cents in most, but not all, shops. But I wouldn't be surprised if many cashiers don't know they should accept those coins.
All I want is for all paper cash to be plastic so I can wash the covid off of it. I support getting rid of the penny, but I feel that plastic cash would make more of a difference.
CGP Grey has a wonderful video on the penny, he is my favorite YouTuber.
I'm old enough to remember halfpenny coins here in the UK. I've got a few someplace that I kept.
When they were withdrawn in 1984, they were worth more than 1.5p in today's money. The country survived, so I dare say we could safely discontinue 1p (and 2p) coins.
I remember Polo mints going from 4.5p to 5p in ~1975. (I was 7 and such things were important...). It's curious that the minimum possible percentage increase then was 11%, but now, when Polo mints are around 60p, the minimum possible increase is 1.7%. Getting rid of all coins < 5p would return us to the same "granularity". (And possibly be inflationary.)
Yes, we don't need such small amounts of money.
Just always round up, when paying and when giving the rest back.
> All those $9.99 products? The prices would be jacked up to an even $10!
Only logical thing, I know this "wow less than 10$" tricks people into buying stuff, but it's just stupid that it's the default to give me back 1 penny whatever I buy.
Actually, the pricing of individual items doesn't change. (Not least because of GST the price you pay at the till is not the sticker price.)
Where I live the 1c and 2c coins were killed some time ago. The smallest coin now is a 5c.
The way it works is that you go to the checkout, get a final total. If you pay cash then the change is "rounded up" to the nearest 5c mark. If you pay via card you pay the exact amount.
It's really not complicated, and frankly no-one cares about it.
In the interest of full disclosure I was talking about USA GST (Sales Tax) not the tax where I live. In the US the price on the shelf seems to be a "rough indication" of how much you may pay when you get to the till...
That I noticed this suggests I live in a VAT country not a GST country :)
Interestingly, I've noticed that in certain parts of the Amazon website these prices are rounded up for display. Maybe the price jumps out more when given in this format, since it breaks the pattern? I also notice that multibuy deals in supermarkets are invariably multiples of 50p (e.g. 2 for £3).
Makes you wonder how much of this stuff is calculated decision making and how much is just dogma.
I’d rather we do a reverse split of the dollar - say 10:1 - 10 old dollars = 1 new dollar, essentially take us back to 1950’s pricing, coins become relevant again! + it has the added benefit of undoing all the changes in laws/refs that were not inflation adjusted. Not holding my breath...
If you think about it this way, it really does make a decent argument for switching larger denominations to coins.
Personally, I just use my debit card for everything and only use cash when the vendor specifically doesn't allow credit, which is increasingly rare with square and other methods of taking payment from a smartphone.
And we started a long time ago. 1 and 2 cent coins were demonetised in 1990, $1 and $2 coins replaced notes in 1991, all notes were switched to tough washable polymer in 1999, 5 cent coins were dropped in 2006 (and most other coins were reduced in size at the same time). I also almost never use cash.
It's not like we have a low-value currency unit either (e.g. Yen). Prices in NZ dollars are usually less than double the US dollar price in the US (and our prices include sales tax and shipping to NZ).
Yeah, if the US does this the nickel ($.05) should go too while we’re at it. We’ve put off getting rid of the penny so long that even 5x a penny is worthless. Switch to $.10, $.50, and $1 coins.
And standardize on a single sales tax rate across the country?
And then build that into prices instead of being tacked on extra?
Just let everything actually cost increments of $0.25. Let me buy something on the McDonald's dollar menu with an actual dollar. Not with two dollars and then dealing with seven chunks of metal in return.
(I mean, as long as we're dreaming. Because if we haven't managed to get rid of the penny over the past 30 years, I don't see why we'll ever actually manage to in the future. Sadly.)
I'm personally not a big fan of sales tax either, but I do concede there are two good arguments for it.
First, it's the main tax foreigners pay when visiting (hotel taxes being the other). And since foreigners are benefting from local roads, police, and everything else just like citizens do, there's an argument they should contribute local taxes too.
But second, that sales taxes are aren't necessarily regressive, and could be made progressive. You don't pay sales tax on necessities like rent and supermarket food, so that's already a progressive aspect. And sales tax could be made more progressive if it were higher based on product categories (e.g. expensive cell phones, etc.). Many countries have a huge number of sales tax brackets by product category for this reason -- but they're built into the price, so stores know but consumers don't see the difference.
I do personally think it would be simpler though to just set sales tax to zero, fund local taxes with income+property taxes mainly, and jack up hotel taxes (in a highly progressive way) in destinations with so many tourists that they actually make a big difference to local infrastructure costs.
There was an entire amendment specifically declaring the ability to levy (unapportioned) income tax. It was sufficiently passed, and overrides everything else that came before it.
You can't play a game of 'gotcha' and invalidate something like that off the way you want a word interpreted or some bureaucratic misstep.
Lets assume the 16th was ratified (it wasnt, but set that aside). One might ask the IRS Comissioner where the law is, plenty of IRS agents have tried: https://www.youtube.com/watch?v=uNNeVu8wUak
It's also a rather obvious violation of the 5th. The gov does not own us; it's the other way around.
So far 9 states have removed state income tax completely: AL, TN, FL, NH, SD, WY, TX, WA, NE. A good start; seems to really bother the authortarians.
Where what law is? And something like this can't be undone by being clever. The intent of congress is for income tax to exist, and so it is enforced by the executive, under the supervision of the judiciary. That's all that really matters. And the case law is solid on how to interpret the rules.
The most that could happen is congress going 'oh, that was worded badly' and fixing the wording.
The 16th amendment cannot be in violation of the 5th. That's not how amending works.
Also doesn't that argument apply to all taxes? It seems pretty clear that blocking all taxes was not the intent, based on the rest of the constitution.
> A good start; seems to really bother the authortarians.
Really? I've never seen anyone bothered by that. Sounds fun to watch.
Perhaps we should ignore a small % of X Amendment claims? That would be a small gap right?
The Amendments dont confer rights to the people; they only remind the people of the things they gov has no power to do. See Amendment 0:
"THE Conventions of a number of the States, having at the time of their adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added: And as extending the ground of public confidence in the Government, will best ensure the beneficent ends of its institution."
Inalienable rights and differences in outcome are unrelated things, hence mentioning tariffs as protection by attack with slave labor. It's the primary job of a government to protect it's borders, physically and economically.
As that documentary nicely lays out, there is no constitutional law that anyone can point to on individual income tax. The IRS commissioner admits it.
The US penny is perhaps the most illustrative example of why I am wary that the US government can do ANYTHING efficiently.
The continued existence of the penny is absolutely ludicrous. Here we have something that has almost zero economic value to everyone involved. It costs more to mint them than they're worth. It likely costs more to even transport or count them than they're worth. It is almost entirely just economic drag on every transaction that involves them. Yet somehow, we can't find the political will to _just_ _stop_ _making_ them. Momentum truly is the most powerful force in politics.
It's sad, because it doesn't have to be this way. I am in favor of socialized health care. I could even be convinced that some amount of UBI may be a good idea. I am in favor of a strong social safety net. But the fact that this country can't even figure out how to stop making a coin that is worthless tells me that it is probably asking a little too much to expect that the federal government can competently manage anything as complex as healthcare or the livelihoods of millions.
> can't even figure out how to stop making a coin that is worthless
One might wonder whether the problem isn't bureaucracy per se, but rather that there are actually many larger dead-weight losses in the government that are being focused on, such that this one is comparatively trivial and doesn't even register on the priorities list.
For everything else you can say about it, the current administration has been heavily focused on "ways the government can be improved by doing less" (i.e. "red-tape reduction.") And yet, it has still not even mentioned considering doing this. I'm guessing the elimination of pennies is just not the low-hanging fruit it seems to be — there are fruit even lower.
Isn't this largely irrelevant since the producer of pennies makes up for this when they print any other form of currency?
> But the fact that this country can't even figure out how to stop making a coin that is worthless tells me that it is probably asking a little too much to expect that the federal government can competently manage anything as complex as healthcare or the livelihoods of millions.
The worth of a unit of currency should not be measured by how much it costs to produce. If we're using that metric a $1 note has just as much worth as a $5 note, and a $20 note is equivalent to a $50 note. A single $50 pays for plenty of pennies in terms of cost.
I honestly don't know where I stand on keeping/removing the penny, but I do know from personal experience that counting and saving pennies was useful for me when I was very poor. I know that rounding down saves the consumer money, but putting the savings in a jar and treating yourself to something when you cash in your jar is something of value that is lost.
I don't count pennies these days, but I used to, and I definitely picked up pennies off the street. Should we design economic/currency policy to 'help' the poor instead of actually helping the poor? Probably not, but I wince when I hear people say that pennies are worthless.
Ok, but if I pick up pennies between my car and the grocery store the opportunity cost is basically nil, and then after a few months I'd have a non-trivial amount of cash.
If you picked up 10 pennies a day, you would only have $3 at the end of the month. Assuming you are not living in poverty, these sort of hyper-frugal behaviors are quite interesting to me from a psychological perspective.
My country uses the US Dollar as currency but since tax is added to prices we dont use pennies as much as in the US.
* Most prices are given in 5 cent multiples.
* The pennies I get are usually from change in supermarkets or from produfts with .99 prices
Vending machine and parking machines don't accept pennies
I do find the Dollar Coin annoying, which we use instead of the Dollar Bill. It's very easy to get lots of dollar coins as change.
I wish we used the $1 and $2 bill though. It would be very useful for the average transaction amount we have here. Our neighbouring countries all have bills near that amount.
I moved from a country that has pennies (Germany, so EUR cents) to one that doesn't (Switzerland, CHF) age 18.
The smallest coin is 0.05CHF. It's still worth enough that you might use a handful of them to make change for a small
amount like, say, 0.40CHF.
Grocery prices either have a resolution of 0.05CHF (all major retailers) or if not, your bill will be rounded to a resolution 0.05CHF to the customers advantage (e.g. at Lidl).
I have never ever once missed the equivalent of the 1- or 2-cent EUR coin. They were a pain to have in your wallet, and an insult to any tip jar or piggy bank.
I have no rational idea why the concept hasn't caught on more widely.
There are billions more pennies lying in jars in people's houses than are in regular circulation. Even if we were to stop minting new pennies today we could coax the population to turn their pennies in and we wouldn't run out for centuries to come. There is no shortage of pennies. I don't care what Canada does, you're not going to take my pennies away.
A good way - a single day where each turned in penny gives you 3 "cents" in exchange. Of course you would be giving out only dollar or higher bills in such a program.
I know this is about the US penny, but from a UK perspective I think it'd be much more useful to kill the two pence piece. Those coins are massive and, in my experience, never used except to put in those charity buckets. One pennies, however small their monetary value, at least help you make up odd prices, but twos are always just too much to make up a £2.47 bus fare.
Most likely both the 1p and 2p would go and prices would be rounded to the nearest 5p (so you wouldn’t need a penny to make up the odd price). But the UK govt already said they’re not doing this.
> By the 1990s, Kolbe says, he was introducing new legislation to kill the penny with every new session of Congress. But he kept facing resistance — for example, from the speaker of the House at the time, Dennis Hastert, who represented a district in Illinois, the home state of Abraham Lincoln. Lincoln, of course, is on the penny, and Kolbe says that proved to be a major roadblock.
I hear this a lot, and I think its a weak argument. The original coinage act (1792?) authorized a $5 coin. Replace the Lincoln penny with the Lincoln $5 coin; you continue to have a Lincoln coin, you trade a useless coin for one that will be very useful for the next 100 years, and now all US currency with Lincoln on it is $5. Win-win-win.
Honestly, I've wondered from time to time what effect (if any, clearly) penny's having an actual metallurgical value goes towards stemming inflation and creating not a "gold standard" but rather an accidental "copper and nickel standard"?
It's really funny to talk about the government making or losing money when producing money ("seigniorage"). It really shows how money is just pretend numbers and the foundries can create or destroy it at will depending on the political winds (inflation being good for debtors and deflation being good for creditors). There's a reason the monied interests are against inflation of more than 2%, and it's because it would cause the debts logged as assets in their books to be worth less. Honestly, they would prefer deflation, but they were forced to accept some inflation as the cost of a growing economy.
My favored strategy would be be to put Harriet Tubman on the penny as the best path forward.
This puts a wanted social change into the culture (Putting a black person on US currency) without removing any president from existing bills (Lincoln still stays on the $5) and erasing history.
Additionally, the first black person on US currency should appear on a coin rather than paper money as they’re harder to deface. Given the media situation in this country, I’m 100% sure the media will find or invent some disfigured paper bills with racist slurs to generate controversy and inflame racial tensions even further.
Early on in the current administration I half-joked that it'd all be worth if if at the end of it we (a) switched to ISO216, (b) bailed on Fahrenheit, and (c) ditched the penny.
Now that would be a legacy any POTUS could be proud about.
All coins are pretty terrible. When the US was trying to push those dollar coins, there was an argument that the government would make money by selling the new coins (through seigniorage), but that argument was counteracted by the fact that people just wouldn’t use those coins and it would end up sitting in a jar somewhere rather than in a bank earning interest (the velocity of money would be reduced).
The government should put less money into designing and minting/printing new money and instead focus its resources on making the “unbanked” banked. Doing so through the post office has been talked about for years.
There is a much simpler solution. Obviously people want their "0.01" coin, so we should instead envalue the currency. Cancel the dollar, make dollar2.0 which is exactly 10 times as valuable and done. You eliminate everything below 10cents effectively, the metal industry is happy to supply material for new coins, coin collectors are happy to get new coins, banks are delighted to make a bit of profit skimming a few dollars off people's accounts when converting their currency in their databases, everybody[1] wins!
Australia dropped the copper 'penny' (one cent) along with its two-cent coin ages ago and nobody complained except for a few electronics people like me who used them as heat sinks for diodes and other electronic components. (Yuh simply drill a hole and solder them onto the wire leads of hot components.)
At exactly one cent each, they were much cheaper than their proper catalogue equivalents, we were left all adrift when our cheap source of coppers ran out.
So guys begin stocking up now while you've still the chance.
I've actually found that I virtually never use cash anymore, virtually every place has a PoS now that accepts some kind of card of digital payment system. Heck, my favorite BBQ place which is run on weekends out of a vacant gravel lot uses square.
I also travel overseas a bit, and it's always strange to visit a country that's pretty cash heavy Japancoughcough. But even then we mostly get by with our credit cards.
In Chile they have 1 peso pieces so small and light you can blow them from your hand like fairy dust.
The only stores that use them are big chains that operate on enormous economies of scale, e.g. Hiper Lider.
When backpacking there (on very little $) a homeless person asked me for some change. I dug into my pocket and offered him some change and he just lauuuughed at me.
Interestingly, $1 USD = ~800 Chilean pesos in 2020, but was over 2000 Chilean pesos in 2006.
The Japanese 'penny' is (was?) made of aluminum. It looked less like currency and more like a token from a deluxe version of a board game. It was just too insubstantial.
As we've moved to zinc with a thinner and thinner copper jacket the US penny has drifted in that direction, but the relief is much more pronounced and makes it look more 'real'. Probably more expensive to make though.
Do not understand why we still mint them--there are enough pennies in existence to last forever, the problem is they are just sitting in jars on shelves. Instead of minting new ones the treasury (through banks) should just start buying them for 2 cents each until enough come back into circulation.
April 10, 2025 is when the penny should cease, so we can commemorate it on nickel/dime/quarter day 05/10/25. And yes, it should be April 10 and not October 05 because this will be an American holiday dang it.
Go further. I haven't used coins in 10 years. Get coins - put them all in the 'penny tray'. Or give them to the cashier. Or hand them to somebody nearby. All else fails, toss them in the trash as I leave the store.
While I don't throw change out info not use coins ever. Any coins I get in change goes directly into the tip jar or change tray in the car or bucket at home. It's not going to be reused until I take a bunch of it to the bank.
I would say get rid of all change but if absolutely necessary keep the quarter. With cards being so prevelant who cares, they will stil have the exact amount. To be fair I think checks should basically be banned or not accepted anywhere. They are outdated forms of payment. We don't need to keep them on life support when they are not economically viable.
One thing this Pandemic brought about is the importance of contactless payment. Exchanging cash is unhygenic. Signing credit card receipts is unhygienic. Doing away with pennies should just be a starter.
Replacing all money with copper-coated currency like pennies would probably be more hygienic, considering copper is one of the most effective anti-microbial things out there.
Seems to me it mostly doesn't matter if 95-99% of all transactions go digital. So basically it's less work to do nothing about the penny because the issue will solve itself.
The first time I read a proposal like this I thought it was a terrible idea, but the penny has lost more than half its value since then. I'm much more sympathetic now.
So the minimum you can pay for something is $0.50?
That kind of stinks... individual fruits and other produce currently cost less than $0.50. I think $0.10 should be the minimum because then you can just drop the hundredths digit and prices will be, i.e. "$3.2", "$99.9", etc.
But then how would we make souvenir flattened pennies for .26 at tourist traps?
Seriously, I haven’t used cash in so many years that I literally can’t remember the last time I touched paper money or coins. Maybe 15 years ago? As far as I’m concerned, we’ve already transitioned to a 100% digital economy and there is no longer a need for analog money.
The US Mints could just sell blanks to the tourist traps and they in turn could raise the price to $1.
I use cash all the time. I like to round out my errands with a beer at a brewery before biking home. Hand the server a $5 bill when I get the beer, so fast also a strong tip on the cheapest beers. I'm also forced to use cash when I purchase my medical marijuana. I drink Americanos when I purchase a coffee, $2 or $2.25 is pretty reasonable but I sometimes can get the exact change for a place charging $2.15.
I think digital and physical money has it's uses and I will use cash in my wallet first because any phone or credit card solution is slower.
> I think digital and physical money has it's uses and I will use cash in my wallet first because any phone or credit card solution is slower.
Surprised you've had that experience, I've always found waiting for the cashier to make change to be a long and arduous process, while I can simply tap my watch on the reader or insert my card and move along with my day. Not to mention that I have no interest in carting around a pocket full of coin change.
Think of all the time that everyone would save going forward not having to deal with pennies. It's worth spending some time up front for a benefit like that.
The US used to have $1000 bills (and $10,000 bills, but those were only for internal gov't use). I'm pretty sure we're stuck with $100 as the top denomination to make organized crime more difficult.
Also, it's WAY easier to counterfeit a coin than a bill.
>Also, it's WAY easier to counterfeit a coin than a bill.
I think that depends. Some countries do integrate security features in coins.
The important question isn't whether it's easier, it's whether it's more cost effective. It's probably easier to counterfeit a USD penny than a USD $20 bill, but it would be less economical to do so.
Singapore & Brunei (1) had a $10000 bill until 2014 (worth ~7400 USD), and still have a $1000 bill (as does Switzerland with its better exchange rate)
(1) I don't know what the word is (linked?) but their currency is interchangeable. You can go to a Singapore bank with $100 BND and get $100 SGD (no fee) and vice versa.
> I don't know what the word is (linked?) but their currency is interchangeable. You can go to a Singapore bank with $100 BND and get $100 SGD (no fee) and vice versa.
I believe the term is "pegged"[1], although what you describe sounds like it is much more involved.
This propaganda is part of the inflationary process, which is intended to increase economic velocity at or faster than the rate of savings, at the expense of savings.
Soon, a dollar will be thought of the way we think of a quarter, and the quarter will become the new dime. Decent family homes will cost north of $2.5MM, and people will say, “back when I was a kid...”.
This comment is at the very bottom of the comments right now and I'm glad I looked for it.
I agree by killing the penny we essentially force inflation to happen. Bread priced at $.99 can be sold at $.98 far more easily than bread priced $1 can be sold at $.95. By removing the penny our jumps become more volatile. Something increasing in cost by a penny or two might take a product from 99¢ to $1 or reduce the profit margin a bit now, but when there is no penny the $1 product that needs to cost 2¢ more is going to cost $1.05.
We shouldn't kill the penny because it is a reminder that our currency has been inflated and is no longer worth a small fraction of what it once was. Never forget that pre-1965 coinage besides the penny was made of 90 percent silver. A face value of 1.40 in pre-1965 dimes and quarters is worth 20.00 today, the fact that a penny, not even made of copper, is too expensive to make should be concerning.
(1) Inflation doesn't matter if you're not hoarding cash. By and large, real estate tracks inflation across the United States. Stock indices exceed inflation. Inflation doesn't matter to you if you aren't holding cash.
(2) It doesn't matter how we got here, we're here, and it's useless.
Canada stopped producing pennies in the fall of 2012. [0] The sky didn't fall. There was no great debate, no public opinion polls and politicians swearing heartily about the demise of our great nation. (Ok that's probably not true. For too many politicians that's all they do.)
There was resistance when Canada dropped the $1 bill in favour of a Loonie (a $1 coin with the image of a loon on it). People bitched about having too much change in there pocket, pockets became too heavy, etc. I do however see more coins in tip & donation jars now then I ever saw paper money.
This is a key difference between US policy & Canadian policy that I have informally noticed while growing up on the border (with family ties on both sides).
Canadian government: We think it's a good idea, so we're going to do it.
US Government: Lets have more opinion polls, and countless politicians swearing against any decent public reform or change to the status quo. Watch the media whip the public up into a frenzy. I guaranty that this will create a more frantic response and airtime then the BLM & Police Reform protests did.
Side note: If you drop the penny, for the love of $diety change your sales tax structure so that it's a multiple of 5. 5%, 10%, 15%, etc... Since Canada changed but left the taxes the same (14% in Ontario IIRC) there seems to be a lot of rounding-off in favour of companies instead of consumers. $0.01-$0.02 per transaction * millions of transactions per day has got to make some accountants happy.
[0]https://www.cbc.ca/news/canada/canada-s-penny-withdrawal-all...