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A Penny Abolished Is Two Pennies Not Collected Through Coercive Taxation
Last week Mrs. Cole and I took a trip to Niagara Falls. For those of you who don’t know, Niagara Falls is right on the border between the United States and Canada. So there’s a Canadian side and an American side. On this trip we stayed on the Canadian side and spent most of our time there. (By the way, everyone says the Canadian side is nicer and that is accurate. The American side looks like Atlantic City away from the boardwalk.)
Canada is, in theory, a foreign country. But if you live in upstate New York… well, not so much. Going to Canada is a lot like going to Vermont (or it used to be). I see as many cars with Quebec and Ontario license plates as I do Vermont plates.
For those of you who live in other places, we get Canadian pocket change mixed in from time to time. Canadian nickles, quarters, dimes and, of course, pennies, are the same size as their American counterparts, so you may not even notice. (Except that they don’t work in machines.)
But on our trip to Canada, I noticed this sign:
Canada, you see, having already banished the one-dollar bill in favor of a coin with a duck on it (the Canadian constitution requires all coins to have either a bird, a beaver or a caribou on it), is doing away with the penny. Transactions will now be rounded to the nearest nickle. There was a period of transition and a public information campaign and therefore it has been easy and drama free.
‘Nuff said.
Except it’s not ’nuff said! Not for nothing, but how the hell are Canadians ahead of us in this regard? Pennies are damn near useless.
Each penny the US government mints costs between one and a half cents to two and a half cents to mint (I’ve tried to nail down a more precise figure, but it depends on the cost of the metal and when you’re asking). Between pennies and nickles (also damn near useless) its costs 105 million dollars more to mint them than they’re worth.
Now, when you’re talking about a country with a 17,000,000,000,000 dollar national debt, 105 million dollars is small potatoes, but its still 105 million dollars that needs to be taken by force from someone (ME) or borrowed from Communist China.
And that 105 million dollars is just the government’s losses on the penny. Add to that the handling costs of all those pennies in a country with 300 million people. Every business has to have pennies. Every consumer who makes a cash purchase gets them in change, and since each of those pennies only has a third the buying power it had when I was born, they aren’t worth spending. That means we either have to spend time rolling them, fill mayonnaise jars with them, or worse.
If we abolished the penny, not only would less money need to be taken from my pocket, but we could banish this copper colored menace from our lives. You won’t notice, I promise. Mrs. Cole and I didn’t notice at all last week, especially since we paid for everything with cards.
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While I agree with your sentiment. When was the last time the federal government abolished anything of it’s own creation?
Amen. As I posted on social media when they eliminated it last year, I increasingly feel like I live in a Bizarro world in which Superman is a villain and Canada is a model for sane fiscal policy.
But when our penny was introduced, it had the purchasing power of today’s quarter. Nickles and dimes should be retired too.
Why stop at pennies? Eventually, nickels will be just as superfluous and burdensome, then quarters, then dollars….
Remember, the government will be rounding up. More taxes. It will never end.
The line must be drawn somewhere.
Let’s keep the penny.
Why stop there? Let’s introduce half-pennies so we have more useless currency.
If we can’t get rid of this easiest of targets for cost-cutting, we’re sunk.
I agree – not only do I think we should get rid of the penny, I’d be in favor of discontinuing nickles as well.
The best part of this? The Upright Citizens Brigade clip.
Look up the one on Fortune Cookies.
Oh… kill the pennies.
Why stop there? Let’s introduce bartering so We can rid Ourselves of useless currency.
We can stop at quarters if for no other reason than that they cost less than their face value to produce.
Until the manufacturers start rounded up.
There’s no evidence that higher denominations of coinage cause inflation, especially as more transactions are done in credit and debit cards. (Rounding for cash payment goes both ways.) But producing coins costs money. We are producing coins that have so little value, people leave them out on the counter with a sign saying “take one if you need it”. Why should we support such a useless government program?
I my area, we have jurisdictions with sales taxes of 9.2%, 9.5%, 9.6%, and 9.8%. Nearly every single cash transaction is uneven. I’m betting the state would not bother rounding down-every transaction would be rounded up.
I notice the uneven rounding down versus rounding up. Not sure what that’s about, but it’s probably sales tax related.
In my trips to Canada and Europe, I noticed that their currencies use coins for denominations less than C$5 or €5. Once I got used to it, I sort of preferred it.
I’ve tried carrying around Susan Anthony US$1, but I found myself warning retail clerks that I’m not handing them a quarter.
I agree about abolishing the penny, though the Europeans aren’t abolishing theirs. I understand that there repeatedly have been bills introduced to do just that, but they don’t get anywhere. According to Wikipedia, Barack Obama has said he favors getting rid of the penny.
But any president would be foolish to spend precious political capital on the issue, even Obama.
…plastic? or lint?
Somebody posted this (I think) on Ricochet a year or two ago.
“(By the way, everyone says the Canadian side is nicer, that is accurate. The American side looks like Atlantic City away from the board walk.)”
I disagree. While the Canadian side is closer to the iconic Horseshoe Falls, that side is also heavily developed and commercialized. Try finding a tree or a blade of grass over there (not literally, of course). Sidewalks and pavement and hotels and restaurants everywhere. The Canadian side is Atlantic City, if either side is.
Conversely, the American Falls as seen from the Canadian side are beautiful in their own right, and when lit up at night are as spectac as Horseshoe. The lovely and talented Bridal Veil Falls are also on the American side. Furthermore, the American side provides a variety of views of the Horseshoe Falls – arguably better than (or at least as good as) the views from the Canadian side, because of the viewing angles – and the American side has a nice park with plenty of trees, paths, and blades of grass. Have a catch, throw a Frisbee, spread a blanket, etc.
Canada has Horseshoe Falls. America has most everything else.
(Wait – what? This wasn’t the thrust of your post?)
I think this works on the top end of coins as well. The Federal Reserve has bank vaults full of over a billion dollars in $1 coins. They are not popular, people do not want them and change them in for other currency. By law more coins have to be made each year, so the Fed will need more storage space. All this is millions of dollars of investment setting in a back room.
How is it that you’re willing to accept the costs in taxes of producing the penny (not to mention the costs to you and everyone else of handling the damn things), but not that the government might round up on your taxes?
Dude, how are we to that already? I’m talking about getting rid of the penny! That’s a hell of a leap logically.
The thing is, with sales tax, you’d calculate the tax on the total price of the taxable items, not on the individual item, so you’d only be rounding once. So suppose you go to Walmart, buy a hundred things, you’re only talking about rounding once, at most an increase of two cents.
But even if you were taxed on individual items instead of the total, and the rounding was always up (unlikely statistically) and it was the largest round (two cents), you’re only talking about two dollars on a hundred items.
I might agree with you, however
1. It need not be a presidential initiative, it could come from Congress.
2. It’s such a no-brainer that it would require minimal political capital expenditure.
I would have not thought such a modest and obvious public policy suggestion would provoke such resistance.
Americans have a fixation on prices like $19.99, which when tax is added comes out to some wacky fraction in the $20s. The idea of charging a round number with tax included seems to have caught on only in ball parks and places where handling transactions quickly is important.
For whatever reason, Americans will cling to the dollar bill until it’s pried from their cold dead hands (maybe). But, if the Federal Reserve were to offer 101 dollar coins to anyone who brought in 100 dollar bills, within 3 months the dollar bill would be totally withdrawn from circulation.
So, get rid of the penny, buy back the dollar bills, everything will work out OK in the change drawer.
I suggest eliminating the penny, nickel, and quarter. Dollars and tenths of dollars are all we need.
The dime is the highest value per weight and volume of any coin. This means you can pack more value in the sock you hide under your mattress.
It’s been tried. The last serious attempt was in 1990. It would probably pass if such a bill made it to the floors of both the House and Senate. But no one in Washington seems to want to put real energy into the issue. You’re not going to garner campaign contributions over this.
I agree that it is a no brainer. When I get pennies back as change I see them as annoyances. They end up in a change jar or in one of those “Take a Penny” dishes at the counter.
A few weeks ago I was talking to a Canadian about this. He wasn’t quite on board with doing away with the penny but he loved the one dollar and two dollar coins (loonies and toonies, I think he called them). We have been down that road with dollar coins several times already. For some reason the gov insists on making them virtually indistinguishable from quarters. This is way too prone to error for me!
Yeah, the one dollar coin has a loon on it and is called a Loonie. The later two dollar coin got the name Two-nie. I went to college at SUNY Plattsburgh, which is about 25 minutes from the border and roughly an hour from Montreal. My recollection is that in bars in Montreal, the one dollar coin was very convenient as a tip.
The Sacajawea and then the presidential one dollar coins, gold in color, while neat and interesting, and clearly distinguishable from a quarter, are just never going to catch on. So as cool as it is, I’m no longer in favor of it.
The penny though is an easy one.
It was tried 25 years ago. That was four presidents ago.
Look, you do it in the right way, the only opposition you’ll get is from sentimentalists (who don’t have a real case) and the zinc lobby.
I’d be okay with a switch like that. Before 1971, the British used that is still confusing as hell to me. If we switched to a ten based system like that, the half dollar would become more important, because people wouldn’t want to carry around piles of dimes all the time. You might also want a 30 cent piece or something at that point. You’d have to rethink the whole system, but at a minimum you’d need a 50 cent piece. (Which is okay, because for some reason, half dollars always look cool as hell.)
But, considering the resistance, just in this thread, to eliminating just the penny, the thing I rarely stoop over to pick up, even if its my own, a complete redesign like that would be harder to do, no matter how rational it is.
I agree the penny probably should go…But it would take a bit of the challenge out of certain games on The Price is Right if all prices ended with 0 or 5. I’d miss the omnipresent “.99” endings for prices on ads. But these are things I could live with. If there were still penny gumball machines I’d put up more of a fuss.
Contrary to what you might believe, not everyone sees the world the way you do.