Of all the things America does for which there is a broad cross-partisan consensus that it’s a bad idea, but that we do anyway...
Of all the things America does for which there is a broad cross-partisan consensus that it’s a bad idea, but that we do anyway because one interest group just cares about it more… is the continued existence of the penny.
Wait what.
I thought “Abolish the Penny” was kinda a crank position on par with calendar reform and crank-ier than Americans who want government mandated switch to the metric system.
Like, we’re talking about something that would impact every single person in the country and almost every single cash transaction, and would have major implications for sales tax on every single level of government that has a sales tax.
Like, “$9.99” is the advertised price to make it sound cheaper than “$10” and either way, sales tax almost always results in the actual charged price not being divisible by 5, because sales tax rates are basically never a round 5%.
Because everything is always a mess, I would expect some kind of stupidly complex system where cash sales would be rounded up and the retailer and the government would split the spare money, and credit/debit customers wouldn’t be fucked because extra bonus enhanced government/corporate tracking, and there’d be ridiculous lobbying drama about exactly which industries and products get which percentages in a way that enriches Walmart and sets up small businesses to either fuck up and be destroyed for tax theft or have to pay for expensive payment system upgrades to not fuck up, because it’s never going to take off unless it fucks over the poor AND small business AND increases surveillance.
apparently if you just round all cash transactions to the nearest 5 cents, the effect is negligible to consumers and retailers both, and there’s no backend management of who owes whom this 2 cents or that 3 cents.
is there any good reason not to just round that decimal place off entirely?
So I know that the penny is currently the lowest-value denomination of currency the US has ever minted, once you account for the actual buying power of the fractional-cent coins that were minted back when that was a thing; if you really wanted to I guess you could redenominate the dollar to move the decimal point in all prices one place to the right, but then you’re effectively converting dimes to pennies, and I’m not sure how that breaks down in terms of the proposed cost savings for eliminating the penny.
I’m pretty agnostic about eliminating the penny–the Eurozone has not only one cent, but two cent coins also, which seems even more impractical and costly to me, and the Euro is approximately equal to the dollar; and Japan has 1 yen coins, where 100 yen = approximately 1 USD, so it’s not like penny-sized units of currency are considered universally stupid. And I think that points to the reason why nobody has ever gotten around to eliminating it–you might be able to convince people it’s a good idea, or at least get them to throw their hands up in the air and say “I guess,” but the reason we haven’t done it is because nobody cares enough (outside the cranks and anoraks @isaacsapphire is referring to) to actually overcome the legislative inertia to get it done.
Presumably eventually the penny will decline in value until it does become only a unit of account, like the mill, and the government will quietly stop minting them without fanfare, but I wonder what point that will be. The US currency was set up in 1792, I think? And in 1800, the earliest date I can find on an easy-to-Google inflation calculator, 1 mill was worth, in modern terms, about two cents. And it was never thought worth it manufacture 1 mill coin (though 5 mill coins, as half-cents, were apparently made until the 1850s).
Australia dropped 1c and 2c coins in 1992 and rounded all prices to the nearest 5c and it causes absolutely no difficulties whatsoever because why on earth would it.
Wait isn’t that effectively de-decimalizing the currency and reinventing the shilling?