Rounding off to the nearest nickel would have no impact on tax revenues, unless
you think most things are priced at a penny or two below the nearest nickel, in
which case rounding would slightly increase tax revenues.
These issues would only arise if one is paying in cash. And even then, a cent
or two isn't going to make much of a difference.Some other countries
are smart enough to offer items for prices that are rounded up (or down).
$399.99 becomes $400. Plus, the sales tax is included in the advertised price,
so $400 is really $400, and you won't be charged $427.31 at the register.
I recall when the State tax was 2.5%. The local drive-in charged $1.03 for a
$1.00 Purchase. The extra .05 went into the owners pocket. For a large
business those extra pennies add up to real money.
This has been debated for years. I've concluded that the approach of
"Curmudgeon" is an appropriate one. Sometimes being too conservative
and resisting change (no pun intended) is counter-productive.
To KDave - extra half-pennies don't constitute "real money" for
anyone. Firstly, under your drive-in scenario, every transaction doesn't end up
with a rounding up on the tax. A $2 purchase, for example, would result in
exact taxation and a total price of $2.05. Secondly, the owners did not pocket
.05 (five cents) under your scenario, but rather .005 (half a cent).So, the drive-in would need to process 1000 transactions wherein the total was
rounded up by .005 in order to make $5. Or, 100,000 such transactions to make
$500. Even though $500 (in one lump sum) is real money to most of us, it's
probably not "real money" to a business large enough to be making
100,000 transactions that fall into the "rounding up" category. A
company that makes 100,000 such transactions per day is so huge that $500 is
nothing to them. A smaller business that takes a year to process 100,000 such
transactions probably won't consider the extra $41.67 per month to be "real
money." It's chump change no matter what.Let's
keep pennies for bank calculations, checks, and electronic transactions, and
ditch them as cash.
"The other problem with eliminating pennies is sales tax. Would state,
city, county and other governments be willing to round off the tax the customer
pays to the nearest nickel?"Round to the nearest nickel when
the final total of the bill is added up (rather than applying it to each
Exactly right, atl134. And to TimJ, there's no need at all to change the prices
on any products. Just because we do away with the penny doesn't mean we have to
price items only to the nickel.Everything could retain it's current
pricing, and be totaled and taxed at the register to the penny. If you pay by
check, credit, or debit card, the payment goes through exactly as it does now.
None of this requires carrying or physically exchanging any pennies whatsoever.
I would guess this is how more and more transactions occur, which is one reason
pennies are so annoying and increasingly unnecessary.Therefore, the
only scenario in which rounding would need to happen is in cash transactions.
Even if every cash transaction I made caused a 4-cent rounding up of the bill,
I'd be happy to pay it to avoid the pennies. At mini-marts, I usually leave the
pennies in the little dish anyway. I doubt it would ever make a difference of
more than 50 cents in a month to me.Ditch the penny!