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The penny may be worthless, but let’s keep it anyway

Governments have long waged a war on cash in an attempt to curb terrorism and tax evasion. Their stress has typically been on eliminating large denominations, like Europe ’ s €500 bill or India ’ s 1,000 seychelles rupee note .
Two U.S. lawmakers have a much smaller target in mind : the humble penny, possibly most normally found in jars and underneath couch cushions but rarely used to actually pay for things .
Their charge is that the cost to mint billions of these one-cent coins every year is costing taxpayers a belittled luck .
so is it time to end the coin ’ s 230-year range ?

AP Photo

A one-cent history

The penny, the foremost currency of any type authorized by the U.S. government, was initially struck in 1787, though it didn ’ t become legal tender until 1856. Since then, more than 300 billion one-cent coins with 11 different designs have been minted .
Abraham Lincoln became the first U.S. president to adorn a coin when he was put on the penny in 1909 on the hundredth anniversary of his birth ( he wasn ’ triiodothyronine added to the US $ 5 until 1914 ). The Lincoln penny was besides the foremost to include the dedication, “ In God We Trust. ”
Arizona Rep. Jim Hayes first tried to get rid of the penny in 1989, under the Price Rounding Act, and many others have urged its elimination since, leading the television receiver series “ The West Wing ” even to mock the argument in one of its episodes .
Former President Barack Obama lent his voice to the causal agent in a 2013 interview, in which he called the penny a metaphor for the politics ’ s difficulty in getting rid of wasteful services .
The latest salvo came in March, when Senators John McCain and Mike Enzi introduced legislation to eliminate the mint of pennies. The bill besides proposes switching the wallpaper one-dollar charge to a coin and changing the writing of the nickel in order to bring down its cost. They said it would lead to an estimated $ 16 billion in savings .
The penny wouldn ’ metric ton be the first phase of currentness the U.S. has eliminated. We got rid of the half-cent in 1857 .

Why eliminate the penny

One of the most compelling reasons cited for getting rid of the penny is the fact that it ’ mho become unprofitable due to inflation and the rising cost of metals. The U.S. Mint has been losing money on every penny it ’ sulfur produced since 2006 .
last year, it cost the mint 1.5 cents to produce a penny, creating what in the mint universe is known as negative seigniorage. That amounted to a loss of about $ 46 million on the output of more than nine billion pennies .

The primary cause is the soaring cost of metals. The price of zinc, which presently composes 97.5 percentage of a penny, has tripled over the past 15 years. Copper, which makes up the early 2.5 percentage ( and once was the exclusive ingredient ), has risen about fourfold .
The penny international relations and security network ’ t the only coin that ’ s subaqueous. The nickel, comprising three-quarters copper and one-fourth nickel, presently costs 6.3 cents to make – which is practically a steal compared with the 11 cents it cost in 2011 .
Parts of the U.S. government have already stopped using pennies. The Army and Air Force, for case, have banned pennies since 1980 in all abroad military exchanges, where soldiers and their families can shop, because they were excessively clayey to transport .

Some countries have already banned one-cent and other low-value coins entirely. On a fairly holocene trip to Canada, I bought a bottle of wine with cash and expected to get a few pennies back in change. rather, the retailer plainly rounded the price of my purchase improving to the nearest nickel – pocketing the remainder, which became the norm after Canada eliminated its penny in February 2013 .
Australia got rid of its penny in 1992 and is expected to axe its nickel soon .
penny opponents have early reasons besides price. Some are concerned about the environmental damage caused by mine minerals for coins that are thus fiddling secondhand .
Others, like physicist Jeff Gore, head of the advocacy group Citizens to Retire the Penny, are merely annoy that we carry around pocketfuls of low-value coins, calling it “ a big, atrocious waste of time. ”
Walgreen ’ randomness and the National Association of Convenience Stores tried to quantify that suffer prison term in 2006, when it estimated that handling pennies adds 2 to 2.5 seconds to every cash transaction. If every U.S. adult made just one transaction a day, that adds up to more than 60 million in hours spent fiddling with change .

AP Photo/Bernd Kammerer

For the love of pennies

While killing off the penny may seem like a slam-dunk shell, the reason we haven ’ deoxythymidine monophosphate is pretty straightfoward : People love their Lincolns, as President Obama alluded to in a 2013 interview .
When polled about their feelings in 2014, the majority of U.S. individuals oppose the elimination of either the penny or the nickel. In fact, more than two-thirds said if they saw a penny on the labor, they ’ five hundred period to pick it up ( which the New Yorker estimated in 2006 would take 6.15 seconds and pay less than the federal minimum engage ) .
Beyond mawkishness, however, there are a number of hardheaded reasons to keep these coins. Retailers in countries that have banned the penny, as has Canada, are required to round cash purchases up or down to the nearest five cents. This means if a purchase is $ 1.01 or $ 1.02, then the merchant charges you only $ 1. If the price is $ 1.03 or $ 1.04, then the merchant charges $ 1.05 .
This attack algorithm is perfectly fair if prices are spread out evenly across the display panel. however, merchants normally set the price. This means that merchants who strategically set prices could make one or two extra pennies on every cash transaction .
chipotle Mexican Grill tried this rounding method at some of its locations in 2012 to speed up lines. It faced customer backfire at the register when people were given less variety than they expected .
Economists call this strategic price-setting a “ rounding tax. ” Penn State ’ s Raymond Lombra estimated that eliminating the penny and round off purchases could cost U.S. consumers at least $ 600 million a year. furthermore, since the hapless and disadvantaged function cash more than the rich, the rounding tax would fall disproportionately on them .
Others contend that sales tax and other variables lead to an even distribution of final digits that couldn ’ t be well manipulated by a retailer. And some businesses, such as a drugstore chain in Israel, avoided the problem wholly by voluntarily constantly rounding down preferably than up after the area killed off its lowest-value mint .

AP Photo/David Zalubowski

Bribes work better than bans

indeed where does that leave our dearly, beloved penny ?
I believe opponents ’ elementary argument, that we ’ rhenium losing money on them, is unconvincing since the government squanders taxpayer dollars on many of its activities, such as the U.S. Post Office ( which lost $ 5.6 billion in 2016 ) and countless billion-dollar pork barrel barrel projects .
In addition, banning pennies is poor populace policy because sol many U.S. individuals adore the coins.

preferably than passing an unpopular banish, a bright way to gradually reduce the use of low-value coins is to persuade a few major retail chains that do a lot of business in cash to round down purchases to the nearest five cents, like the israeli drug store did .
Why would they do this ? If the above estimate that handling pennies adds respective seconds to every transaction is correct, then by rounding down, companies would increase the numeral of customers each cashier can handle and besides make patrons happier. The increase productiveness might flush be enough to pay for the lost gross .
Inducing people to transition away from pennies with small monetary bribes will be a far more successful scheme than forcing people to give up coins they like .

source : https://leowiki.com
Category : Economy

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