Penny Vote? Should it die?

MrNightly

Found this today while surfing msn. I believe that if the cost exceeds the profit, then it only makes sense to move on. Plus, I think that our society is progressing toward total paperless in the not to distant future, and this could be one of the real first steps.

I voted yes, the U.S. should go penniless!

What do you all think?

http://articles.moneycentral.msn.com/News/TimeToKillOffThePenny.aspx?GT1=8376

bobman1235

MrNightly wrote:

Found this today while surfing msn. I believe that if the cost exceeds the profit, then it only makes sense to move on. Plus, I think that our society is progressing toward total paperless in the not to distant future, and this could be one of the real first steps.

I voted yes, the U.S. should go penniless!

What do you all think?

http://articles.moneycentral.msn.com/News/TimeToKillOffThePenny.aspx?GT1=8376

Whether you phase out the penny or not should have NOTHING to do with the cost to produce it. Honestly, what a ridiculous argument.

Phasing otu the penny sounds great in theory, until you actually put some thought into what a pain in the **** it would be to have to either start counting things in 5 cent increments or rounding everything. If we have no pennies, it means that NO PRICES can be non-multiples of five cents in the entire nation. I see that presenting HUGE logistics problems.

And if you think we're going to see evena MODERATELY paperless society in our lifetimes, you're out of your mind.

unc2701

I've been in several countries that have currency that's close in value (some of them are even locked to our dollar) that don't have pennies. No issues there. Even better, since tax is already included in the displayed price, it's a lot easier to add things up in your head.

No prices can be non-multiples of five cents? So what? if you really think that cost, supply and demand dictate the price to within $0.025, then why does everything end in a 9?

Logistics problem? hell no! Ever notice that you don't pay tax at a movie theater? well, the tax is already in the sale price... the logistics nightmare is having to count out pennies for everyone.

mhardy6647

how do you handle sales tax? Round up? Round down? I don't think so, Tim.

PolkThug

Keep the penny or all retailers will round up. Since I don't own my own business I want the penny.

VR3

I cant stand pennies.

janmike

It will not happen. The monetary value will not cease to exist but a more cost effective method or material may be implemented.

madmax

Time to cash in those pennies before they become worthless. Oh wait, they already are...
madmax

cfrizz

Get rid of the annoying little buggers!

brettw22

Eliminating it will mean that most states will raise the sales tax. States that charge 8.25% tax would no longer be able to collect the 3.25 cents per dollar, so I predict that they'd up the tax to a flat 10%. Elimination of the penny will cost the consumers more IMO.

wingnut4772

brettw22 wrote:

Eliminating it will mean that most states will raise the sales tax. States that charge 8.25% tax would no longer be able to collect the 3.25 cents per dollar, so I predict that they'd up the tax to a flat 10%. Elimination of the penny will cost the consumers more IMO.

Agreed.

MrNightly

bobman1235 wrote:

Whether you phase out the penny or not should have NOTHING to do with the cost to produce it. Honestly, what a ridiculous argument.

Phasing otu the penny sounds great in theory, until you actually put some thought into what a pain in the **** it would be to have to either start counting things in 5 cent increments or rounding everything. If we have no pennies, it means that NO PRICES can be non-multiples of five cents in the entire nation. I see that presenting HUGE logistics problems.

And if you think we're going to see evena MODERATELY paperless society in our lifetimes, you're out of your mind.

Your opinion duly noted.

And tell me how this is such a ridiculous argument that if it cost 1.23 cents to make 1 cent, the country is going further into debt just to make money. How on earth is that ridiculous? And if you noticed from the article, if the penny was no longer produced, than the nickel wouldn't be far behind. So, the smallest "Coin" would be a dime. But of course, you would still be able to use credit / debit / wireless cash / whatever else may come, with no restrictions on the amount.

I vote yes! We gain nothing, by clinging to the past. Let's march onward and discover what the future holds!

brettw22

IF 'marching forward' means that the price for goods or services doesn't arbitrarily jump to compensate, then so be it. I find it hard to believe that state or federal agencies are goign to drop the tax to a flat 5% though.

MrNightly

brettw22 wrote:

IF 'marching forward' means that the price for goods or services doesn't arbitrarily jump to compensate, then so be it. I find it hard to believe that state or federal agencies are goign to drop the tax to a flat 5% though.

See, I don't get how the tax rate will naturally jump or fall simply because a "Type" of currency is no longer in use. All it is doing, is getting us to move away from a "hands on cash" to a virtual dollar. How will that effect the local taxes / federal agencies?

PolkThug

Why are they still making pennies? Aren't there enough in circulation already?

F1nut

See, I don't get how the tax rate will naturally jump or fall simply because a "Type" of currency is no longer in use. All it is doing, is getting us to move away from a "hands on cash" to a virtual dollar. How will that effect the local taxes / federal agencies?

Say you're buying something that costs $206.00 and the sales tax is 6%, which brings the total to $218.36. Do you think for one freakin' second that the state is going to round that down to $218.35 or drop the sales tax to 5%!?! Hell no, they'll either round it up to $218.40 or bump the sales tax to an "even" 10%. Eff that.

Without cash how are you going to handle a private business transaction? Do you think we're all going to carry card swipes??? Ridiculous!

bobman1235

MrNightly wrote:

See, I don't get how the tax rate will naturally jump or fall simply because a "Type" of currency is no longer in use. All it is doing, is getting us to move away from a "hands on cash" to a virtual dollar. How will that effect the local taxes / federal agencies?

First of all, you can't have a differnet pricing structure for non-cash vs cash. That just wouldn't fly. "Oh, we don't have pennies anymore,s o if you pay in credit you have to pay the three cents but if you don't we'll round". In my industry we call that a hack. If a certain "cost" exists, you should be able to create it in cash.

The whole idea of rounding in general seems bad to me. Someone's losing money on the deal.

MrNightly wrote:

And tell me how this is such a ridiculous argument that if it cost 1.23 cents to make 1 cent, the country is going further into debt just to make money.

They're nto making one cent. It's not like every time they make a penny it gets used once and thrown away. Every time they photocopy a tax document it probably costs a penny or more, and those are worth nothing! Abolish tax documents... oh wait, that sounds like a good idea.

unc2701 wrote:

No prices can be non-multiples of five cents? So what? if you really think that cost, supply and demand dictate the price to within $0.025, then why does everything end in a 9?

Psychology. How many times have yous een a price that said "19.99" and said "well, it's less than 20 bucks". Or 8.99 and someone says "Hey, it's only 8 dollars!". I don't think it has anything to do with supply and demand and everything to do with logistics. If you're ok with some kind of hacked together rounding system, th en fine, it's a good idea. If costs just have to suddenly be on 5 cent boundaries.... well every hike in gas prices is gonna hurt that much more.

heiney9

MrNightly wrote:

Your opinion duly noted.

And tell me how this is such a ridiculous argument that if it cost 1.23 cents to make 1 cent, the country is going further into debt just to make money. How on earth is that ridiculous? And if you noticed from the article, if the penny was no longer produced, than the nickel wouldn't be far behind. So, the smallest "Coin" would be a dime. But of course, you would still be able to use credit / debit / wireless cash / whatever else may come, with no restrictions on the amount.

I vote yes! We gain nothing, by clinging to the past. Let's march onward and discover what the future holds!

So you're saying the "cash" price could be more than if you used a debit/credit card. Let's see total bill comes to $17.56. If you use cash you'd have to pay $17.60 (no pennies anymore) but if you used paperless then you could pay $17.56. Why on Earth would that be desirable? Can you imagine the accounting costs involved?

The Gov't is not loosing money making money. It's a function of Gov't ( a cost of doing business so to speak). There are many many things the Gov't does that loose money. Profit and loss are not an issue when it comes to the basic functions the Gov't needs to perform. There are many other programs/incomes that offset the cost of producing money. Sure if you break it down by each single solitary penny produced it doesn't look good (from a cost to produce), but we're better off with a 1c coin, perhaps not copper anymore.

H9

VR3

Lets have a 1 cent coin made out of... Chrome!

No No... Carbon Fiber... or PLASTIC (seems we like that alot) - or recycled milk jugs!

tommyboy

heiney9 wrote:

Sure if you break it down by each single solitary penny produced it doesn't look good (from a cost to produce), but we're better off with a 1c coin, perhaps not copper anymore.

H9

exactly, don't get rid of the penny, just change into a different material to make it cheaper to produce. problem solved.

unc2701

HOLY ****!!!! PEOPLE IT'S NOT THAT COMPLICATED!!!!

Look, you dump the penny. Tax is included in all the displayed prices. The store takes the till at the end of the day and takes 6% of that, if that's what your sales tax is.

So, lets say an item costs $8.99, currently. With 6% sales tax, that's 9.53. The store decides whether they want to go with $9.55 or $9.50 for psychological reasons (Cause the .99 in 8.99 is artificial, anyway). At the end of the day, the store has sold $12,345.80 worth of merchandise, so they send the state 12,345.80*0.06= $740.748. Oh hell, in my example, the store gets screwed for $0.002, but the most the store is gonna get screwed out of is $0.025... and over a year's profits, that really doesn't matter.

Incidentally, they already do round up & down and you just don't notice.

Most stores are set up with barcodes and a big database of prices, so changing all the prices, really isn't that hard.

There's NO cash price, no credit price and you don't have to do the taxes in your head.

Seriously, just go to a country where they don't have pennies. It works fine.

Willow

I head somewhere that pennies are not made of pure copper, just coated with it. Can't remember what was the make-up of it but I do remember them saying it was copper coated.

unc2701

tommyboy wrote:

exactly, don't get rid of the penny, just change into a different material to make it cheaper to produce. problem solved.

They already did that once in the 80's. Break a penny in half- they're zinc on the inside.

and incidentally, that was a major pain, since they had to come up with a method that would result in the penny having the exact same weight and magnetic qualities for vending purposes (not so much an issue now).

bobman1235

unc2701 wrote:

HOLY ****!!!! PEOPLE IT'S NOT THAT COMPLICATED!!!!

Look, you dump the penny. Tax is included in all the displayed prices. The store takes the till at the end of the day and takes 6% of that, if that's what your sales tax is.

So, lets say an item costs $8.99, currently. With 6% sales tax, that's 9.53. The store decides whether they want to go with $9.55 or $9.50 for psychological reasons (Cause the .99 in 8.99 is artificial, anyway). At the end of the day, the store has sold $12,345.80 worth of merchandise, so they send the state 12,345.80*0.06= $740.748. Oh hell, in my example, the store gets screwed for $0.002, but the most the store is gonna get screwed out of is $0.025... and over a year's profits, that really doesn't matter.

Incidentally, they already do round up & down and you just don't notice.

Most stores are set up with barcodes and a big database of prices, so changing all the prices, really isn't that hard.

There's NO cash price, no credit price and you don't have to do the taxes in your head.

Seriously, just go to a country where they don't have pennies. It works fine.

Wow, you solved the problem in one specific type of retail store. Good for you. Apply it to gas prices now.

And I really don' tunderstand why you keep rolling this sales tax thing in with pennies. Talk about a non-sequitur.

It's pretty easy to look at things ina simplistic way and say "it works!" and call everyone who disagrees a moron. It's much harder to think of all the ways it will be a pain in the **** and all of the things it will break.

unc2701

Gas prices:
They ALREADY round up and down on pennies. Ever notice how the price include tenths of a cent? Now they'll just round up and down in $0.05 increments. In the long run, everyone breaks even.

1)The sales tax thing is just another example of where rounding already occurs
2)People bring up the sales tax whenever you talk about getting rid of pennies (see above)
3)It's a stupid pain in the **** that sales tax isn't include in the displayed price, unlike many places outside th US.

dorokusai

I have more important things to worry about than the life and times of the penny. Who cares.

bobman1235

Fair enough. My only point is that the logistics nightmare it would cause, adn teh billions it would cost (and I'm sure it woudl cost billions) to implement this change nationwide, is more than it woudl be worth to make the switch to save maybe a million dollars a year in minting costs.

And now to ease some of the tension this thread has caused, here are some fun penny facts! :

* The Mint estimates that it will issue 8.7 billion pennies in fiscal year 2006.

* The U.S. one-cent coin is 19 millimeters in diameter and weighs 2.5 grams. (See also coin specifications via the U.S. Mint.)

* The composition of the penny is 97.5% zinc and 2.5 % copper.

* There have been 11 different designs featured on the penny.

* Since its beginning, the U.S. Mint has produced over 288.7 billion pennies. Lined up edge to edge, these pennies would circle the earth 137 times. (Figures are est.)

* The average penny lasts 25 years.

* The most "expensive" penny is a rare one minted in 1793. Only four are known to exist today and their worth is estimated at more than $275,000.

* An average of 1,040 pennies are produced every second, adding up to 30 million a day. (Figures are est.)

* During its early penny-making years, the U.S. Mint was so short on copper that it accepted copper utensils, nails and scrap from the public to melt down for the coins.

* The Lincoln penny was the first U.S. coin to feature a historic figure. President Abraham Lincoln has been on the penny since 1909, the 100th anniversary of his birth.

* The Lincoln penny was the first cent on which appeared the words "In God We Trust."

* About half of all coins produced by the U.S. Mint are pennies. (See also coin production figures via the U.S. Mint.

Demiurge

There are much more important things to worry about, which is why I agree with Bobman and wouldnt' change a thing. Shifting the system is harder when it's been in place for so long than it is starting off without it. Pennies are more complex than just getting rid of. In the end it only costs the consumer and taxpayer more to get rid of it.

brettw22

unc2701 wrote:

Most stores are set up with barcodes and a big database of prices, so changing all the prices, really isn't that hard.

This is flat out wrong. These barcodes don't create themselves.....Companies have departments exclusively to change/add/delete these individual bar codes and the properties of each (item cost, tax rate, description, etc etc). You can make an oversweeping change to the tax rate (a generic system wide), but if the solution is to alter the retail price of every item (not a generic number) to make it consistent with a flat 5% increment, every bar code will have to be manually altered. Every store that I set up contained on average about 85,000 bar codes, with grocery stores going upwards of about 250,000 - 300,000 bar codes per store.

unc2701

brettw22 wrote:

This is flat out wrong. These barcodes don't create themselves.....Companies have departments exclusively to change/add/delete these individual bar codes and the properties of each (item cost, tax rate, description, etc etc). You can make an oversweeping change to the tax rate (a generic system wide), but if the solution is to alter the retail price of every item (not a generic number) to make it consistent with a flat 5% increment, every bar code will have to be manually altered. Every store that I set up contained on average about 85,000 bar codes, with grocery stores going upwards of about 250,000 - 300,000 bar codes per store.

Huh? are you saying that when rice crispies go on sale, they put a different barcode on it?

brettw22

First of all, barcodes are generated by the govt for specific items and certain numbers within the barcode identify the manufacturer.

For an example, I'll use Rice Cakes instead of Rice Crispies.

I'm saying that the pricing department makes the decision to put that item on sale, they get into the database, alter the price for that particular flavor of rice cake. Because there's plain, butter, carmel corn, cheddar, etc etc, they have to go into each individual bar code file and alter the price.

Another aspect that most people don't think of or know is that just because Rice Cakes are $1.99 at a store in your neighborhood doesn't mean they're that much elsewhere. Most companies have different pricing tiers that they categorize markets across the country into so it's ultimately possible that the cakes cost 4 different prices across the country.

Complicating it even more, Safeway, Wal-Mart, Albertsons, Kroger, Cub Foods, Dominick's, Acme, etc etc all have their own pricing structure in place for the same items.

Even if the solution is to round the tax rate, companies are going to have to alter their pricing structure to provide an end result in increments of $.05, mandating them to alter all barcode files in their systems.