Is the (US) penny doomed?

[dianeduane]

The question comes up once again, as the one-cent piece now costs more to produce than it's worth.

...The U.S. Mint could lose a mint, or $43.5 million, producing the coin this year, according to at least one expert.

...The Mint is also losing a pretty penny on the nickel. The agency, which plans to produce 1.7 billion of them this year, shells out 6.4 cents for each five-cent piece. Yet, there has been far less hoo-ha over the nickel.

"There is more sentimentality associated with the penny," said Anthony Zito, 53, former president of the Massapequa Coin Club and avid penny collector. "It has a beloved president on it and has inspired a host of sayings, such as 'penny-wise and pound-foolish,' 'a penny saved is a penny earned' and 'a penny for your thoughts.' It is more ingrained in our culture than any other currency."

Well, the "pound-foolish" saying would have come from the British side of things, or at least the pre-dollar side. 

Another take on the situation from further on in the article:

Another penny advocate, Mark Weller, executive director of Americans for Common Cents, an advocacy group, argues that the elimination of the penny would hurt consumers and many charities, which rely on penny drives as part of their donation collections.

Most convenience stores would round up instead of round down, costing consumers $600 million, said Weller, citing a study by Raymond Lombra, a Penn State University economist.

Weller added that Kolbe is pushing the legislation because Arizona is a copper-producing state. The elimination of the penny would force the Mint to make more nickels, which are mostly composed of copper, he said.

"This is special interest legislation at it worst," Weller said.

...There was a lot of noise, I seem to remember, when the euro was first being structured, as to whether or not there should be a one-cent coin. I can't now recall all the justifications for the "yea" or "nay" positions. Whatever: we've got it now.

Meanwhile, it'll be interesting to see if our cent outlasts the US one...

 

 

Comments

[starcat-jewel.livejournal.com]

As if that would ever happen. You think the government (Federal, state, or local) is going to give up even a fraction of a cent of their taxes? They round up now for exactly that reason -- if your total with tax comes out to $2.491, you pay $2.50, not $2.49.

[atimson.livejournal.com]

I have to say that I haven't exactly paid attention—so far, I've recieved a refund on all of my withheld taxes. I'll get back to you in three years, when I'm out of college & have a real job. ;)

[ts-umbra.livejournal.com]

Umm, many/most people with real jobs setup withholding so that they get a bit of refund...

Also, the rules apply to all totals, not just the amount you own field.

[ts-umbra.livejournal.com]

Actually the Feds use real rounding. The IRS will split the difference with you at whole dollar amounts (so $2.491 becomes $2, $2.51 becomes $3)

From the IRS 1040 instructions (http://www.irs.gov/pub/irs-pdf/i1040gi.pdf):

You can round off cents to whole dollars
your return and schedules. If you do round
to whole dollars, you must round all
amounts. To round, drop amounts under 50
cents and increase amounts from 50 to 99
cents to the next dollar. For example, $1.39
becomes $1 and $2.50 becomes $3.
If you have to add two or more amounts
to figure the amount to enter on a line, 4
include cents when adding the amounts and
round off only the total.