Smart people stop using cent coins

In article "Bob Flaminio" writes:
Joe Fischer wrote:
I don't know how I would cope with rounding the total.

But you already do -- on your 1040. The IRS has you round the totals to
the nearest *dollar*. This has not, as of yet, caused the collapse of
modern civilization. You'll do find with your sale tax statements, trust
me.

Hrm. You must have a very strict government. Overhere you round amounts
up or down to the nearest Euro, whatever you think is the best. Tax on
subEuro amounts is peanuts.
--
dik t. winter, cwi, kruislaan 413, 1098 sj amsterdam, nederland, +31205924131
home: bovenover 215, 1025 jn amsterdam, nederland; http://www.cwi.nl/~dik/

In article writes:
The state sales tax form has no rounding now, and it
has to be filed within 20 days of the end of the quarter,
it presently requires all figures to the cent, and requires
shipping and handling charges be included in sales total,
with actual postage then deductable.
Not only that, the sales tax has to be included also,
then that total has to be divided by 1.06 to get the net sales,
then the sales tax is calculated on the net total.

I thought already that the US sale tax system was stupid. Now I am convinced.

A merchant discount is allowed, Walmart must gain
thousands on this, I don't bother with it.

Especially this part. Apparently the US sales tax system favours large
sellers.

In the EU tax is payed only on the "markup". But each company from producer
to retailer will pay its part. ("value added tax", "mehrwertsteuer",
"taxe value ajouté", "belasting toegevoegde waarde".) And, there are
no discounts.
--
dik t. winter, cwi, kruislaan 413, 1098 sj amsterdam, nederland, +31205924131
home: bovenover 215, 1025 jn amsterdam, nederland; http://www.cwi.nl/~dik/

"Dik T. Winter" wrote in message
...
In article "Dr. Richard L. Hall"
writes:
"Dik T. Winter" wrote in message
...
In article Paul Anderson
writes:
In article , Dr. Richard L.
Hall
wrote:

The individual transaction is rounded up or down. But that
doesn't
preclude the merchant from raising the prices on the individual
items, does it? You're making an assumption that that will not
happen. I think you're wrong. In fact, from previous
experience I
know the prices will go up.

To my knowledge, prices have not gone up in any country that has
instituted such rounding. What previous experience makes you
think
prices will go up?

They did not go up when the Netherlands abolished the cent coin in
1980.

You checked every price to ensure that prices didn't increase? I
recall
that period in the U. S. as a time of 10-20% inflation so prices were
going
up rapidly. I would think prices would be rising just on general
principles
because of the uncertainty of the times.

You misread. On purpose I think. Or you did not get my intention, or
whatever. Prices did *not* go up because of the abolishment of the cent.

How do you know that? Either prices went up or they didn't. And if prices
did go up, how do you know a part of that increase wasn't associated with
the costs involved with the elimination of the cent and the changeover to
rounding?

I don't believe that prices did not go up at all. In perhaps one of the
the most inflationary times that the world saw in the last half century?
Prices didn't go up in the Netherlands.

At least not particularly so as was the case with the introduction of the
Euro, which was another beast altogether. Indeed, every change, and
every non-change will have merchants rising their prices.

Oh really! I thought you just said prices didn't go up?

But you assumed
that prices ending in .x9 would rise. That has *not* been observed.

No I didn't make that assumption. I assume all prices will be going up but
it may be most evident in the prices at $x.x9. There would be a tendency to
round these up.


But
if
they did go up, how would you know if a merchant didn't include the
cost of
the changeover in his price?

Because there was *no* cost involved in the changeover when the cent was
abolished as a coin. Rather, the merchants had a profit from it.

The merchants made a profit from it but the consumers didn't have to pay for
it. Amazing economics! I wonder where that profit came from?


Somebody has to pay for the changeover of the store's cash
registers.
Somebody has to pay for the time the cashiers are going to spend
arguing with customers over rounding.

Right now, somebody has to pay for all the time peopel spend
fumbling
for pennies and the time clerks spend handing them out.

Yup. That is *exactly* the reason that supermarkets in the
Netherlands
wish to abolish the 1 and 2 euro-cent coins.

Are you saying that everyone who fumbles for coins are fumbling for
cents?
I was behind a woman the other day who was looking for a nickel. She
searched every pocket in her purse. After a few minutes, the clerk
pulled
one out of his pocket and told her she could give it to him the next
time
she was in the store.

No, I am not saying that. It is the fumbling for pennies and the clerks
handing them out. The kind of fumbling you observe can even be for a
dollar bill, or whatever.

Somebody will have to pay for the time spend explaining that
this
only happens when cash is tendered.

A sign at the register will do that. In a few days, everyone will
have
seen the signs and understand. Sort of like everyone knows what
the
new $20 bills look like within a short time of their introduction.

Eh? You must be stupid in the US. In the Netherlands in 1980 the
switch
was smooth. No signs at all. Just a news item on television, radio
and
in the papers, and that was it.

The Netherlands has only 16 million people in 14,000 sq mi with how
many
taxing authorities? Probably only one? By contrast, the U. S. has 280
million people in 3.7 million square miles divided into 50 states with
each
state and many municipalities in each states having separate taxing
authority. It is a little bit more complicated here. And by the
lastest
currency conversion http://www.xe.com/ucc/convert.cgi, the Netherlands
Guilder was valued at about $.52 U. S. . That would make your one cent
coin
equivalent to our half-cent coin which we got rid of in the 1850's.

Yes, so what? What has the abolishment of the cent coin to do with taxing
authorities?

Obviously you don't seem to understand that the U. S. is a much more complex
country than the Netherlands. and the changeover will be much more
complicated here that it was in the Netherlands because of that complexity.
You have a tax added to each item and it is uniform across the country if
you have only one taxing authority. We can't do that here because there are
several hundreds of taxing authorities.

And, yes, we got rid of our half cent in 1948, of our cent
in 1980. So in 1980 our smallest coin was 5 cent, equivalent to your
about 2.5 cents. Succesfully were introduced the 1 gulden coin, the
2 1/2 gulden coin and the 5 gulden coin.

...
Eliminating cash-register sales tax addition will have a greater
impact,
I think. Including sales tax in consumer prices makes it much more
simple,
and it will not have a great effect on the amount the government will
get.
A few cents, or something like that.

That's what it think would have the greatest impact. But as I said,
pigs
will fly before that happens in the U. S.

Finally something we agree on.
--
dik t. winter, cwi, kruislaan 413, 1098 sj amsterdam, nederland,
+31205924131
home: bovenover 215, 1025 jn amsterdam, nederland;
http://www.cwi.nl/~dik/

Dr. Richard L. Hall wrote:

I don't believe that prices did not go up at all. In perhaps one of the
the most inflationary times that the world saw in the last half century?
Prices didn't go up in the Netherlands.

The annual inflation rate was indeed high in NL (and DE and some other
European countries) at that time, something like 5 to 6 percent. But I
think that, if you compared the consumer price indexes of, say, the
Netherlands 1980 and some of the neighboring countries 1980, and found
no significant difference, that could well be an indicator of what Dik
and probably pretty much every other Dutch consumer observed at that
time - that doing away with the 1 cent coin had no inflationary effect.

At least not particularly so as was the case with the introduction of the
Euro, which was another beast altogether. Indeed, every change, and
every non-change will have merchants rising their prices.

Oh really! I thought you just said prices didn't go up?

Guess his point was that merchants do not really wait for the abolition
of a coin if they want or need to increase prices ;-) Two years ago,
and shortly after that, many people in Euroland, noticed price increases
due to the cash changeover. Interestingly, the so-called "felt
inflation" was, in most countries, considerably higher than the
statistically measured inflation. From what I know, no such effect was
caused by the abolition of the (NLG) cent in the Netherlands.

The merchants made a profit from it but the consumers didn't have to pay for
it. Amazing economics! I wonder where that profit came from?

From the article that I mentioned in the other thread about this subject
("Netherlands: The End of the Cent?") ...

| Volgens het vakblad 'De Levensmiddelenkrant' levert het de totale
| detailhandel een besparing von 30 miljoen euro op, waarvan de helft
| personeelskosten.

My Dutch is not very good but this basically says that, according to the
magazine quoted, retailers could save ¤30 million, about half of that
being personnel costs, if the 1 and 2 ct coins were done away with.

Obviously you don't seem to understand that the U. S. is a much more complex
country than the Netherlands. and the changeover will be much more
complicated here that it was in the Netherlands because of that complexity.

Now that is something I don't understand. No matter whether you buy
something in a complex country or elsewhere, the purchasing process is
about the same: You choose/pick the merchandise you are interested in,
the cashier enters the price, may add some tax (done more or less
automatically), may enter a rebate for some reason, and end up with a
total amount that the customer is to pay.

If you use plastic for the payment, the cashier will press some "card
payment" button, you swipe your card and pay exactly the amount
displayed. If you use cash, the cashier presses some "cash" button, the
total amount will be rounded up or down to x.y0 or x.y5, you pay the
amount displayed. OK, maybe it would be considered necessary to start
some huge information campaign about the change, and *those* costs will
indeed be higher in a big country. But what does all this have to do
with the number of taxing authorities a country has?

Christian

On Thu, 6 Nov 2003 (Christian Feldhaus) wrote:

Dr. Richard L. Hall wrote:
Obviously you don't seem to understand that the U. S. is a much more complex
country than the Netherlands. and the changeover will be much more
complicated here that it was in the Netherlands because of that complexity.

Now that is something I don't understand. No matter whether you buy
something in a complex country or elsewhere, the purchasing process is
about the same: You choose/pick the merchandise you are interested in,
the cashier enters the price, may add some tax (done more or less
automatically), may enter a rebate for some reason, and end up with a
total amount that the customer is to pay.

Maybe cash register companies are behind the failed effort to
pass rounding legislation, at least 60 percent of stores would need
new cash registers.
The USA is a country with 22 times the Gross National Product
of the Netherlands, or 5 times that of Germany, and being required
to buy new cash registers is an unacceptable burden, especially in
view of the fact that coins, including and especially the cent, were
minted specifically to avoid the problems of compromise on value
of items sold.
What is the insanity behind the idea that the cent should not
be used, it is being used, it will be used, so why try to avoid it being
used, and burden the merchant with having to buy new cash registers,
train employees, use mild brainwashing and mind control to pacify
unhappy costomers and possibly loss some to stores that chose to
_not_ round.

If you use plastic for the payment, the cashier will press some "card
payment" button, you swipe your card and pay exactly the amount
displayed. If you use cash, the cashier presses some "cash" button, the
total amount will be rounded up or down to x.y0 or x.y5, you pay the
amount displayed. OK, maybe it would be considered necessary to start
some huge information campaign about the change, and *those* costs will
indeed be higher in a big country. But what does all this have to do
with the number of taxing authorities a country has?
Christian

In a socialist country it may be easier to implement something
like rounding, in the USA, it would be a mind boggling experience
for small merchants, many of whom do not even have a cash register.
And most registers do not have the capability to change the
price depending on method of payment.

People are buying DVD players, picture cell phones, turbine
hub caps, and all kinds of expensive items with excess disposable
income, and really just don't see any need to "save the government
money" on minting cents and replacing worn dollar bills.

Anybody that reads the links I posted will see that the GAO
figures on cost to mint cents is very wrong, many of the costs
allocated to the cent would continue without the cent being
minted, and the cost of distribution are the same, oe more than
the cost to mint new cents.

For some reason it seems the vending machine industry
has a crazy idea that somehow the cent has something to do
with the dollar coin not being more widely accepted.
And it appears only one congressman was behind the
failed effort to pass rounding legislation.

The number of cents minted is a measure of the health
of the economy, in bad times people have to put more effort
into rolling and spending small coins, in fact mant people here
actually save up small coins from change to buy special things
or to give to charity.

Change for the sake of change is a folly, a valid reason
to change the money system does not exist.

Joe Fischer

On Thu, 6 Nov 2003 "Dik T. Winter" wrote:

Joe Fischer writes:
The state sales tax form has no rounding now, and it
has to be filed within 20 days of the end of the quarter,
it presently requires all figures to the cent, and requires
shipping and handling charges be included in sales total,
with actual postage then deductable.
Not only that, the sales tax has to be included also,
then that total has to be divided by 1.06 to get the net sales,
then the sales tax is calculated on the net total.

I thought already that the US sale tax system was stupid. Now I am convinced.

It isn't "the US sales tax system", it is the individual states
that control their own systems.
The size of business activity in the USA is greater than all
the Euro countries combined, and making change with cents is
not a problem at all, there is a small problem with new clerks
when they receive dollar or half-dollar coins, but none with
cents, everybody can count to 5.

A merchant discount is allowed, Walmart must gain
thousands on this, I don't bother with it.

Especially this part. Apparently the US sales tax system favours large
sellers.

It is the same percentage for all, but Walmart has all
the business.

In the EU tax is payed only on the "markup". But each company from producer
to retailer will pay its part. ("value added tax", "mehrwertsteuer",
"taxe value ajouté", "belasting toegevoegde waarde".) And, there are
no discounts.

Sales tax is only paid on markup or value added? There
has been occasional talk of a federal value added tax here, but
I don't think it had much success, taxes are way too high already,
not only on sales, but on other aspects of business.

The cent is the most used coin except for perhaps the
quarter. Being the most used, means the most needed,
and most favored.

Joe Fischer

On Thu, 6 Nov 2003 "Dik T. Winter" wrote:

What has that to do with the abolishment of the cent coin?

There is no "abolishment of the one cent coin" and
there will not be any "abolishment of the one cent coin".

Even if some time in the future the rounding legislation
is revived and passed, cents will still be used, cents will continue
to be saved and enjoyed.

Rather than do away with smaller denominations as inflation
adds up, a way to reduce prices and costs would make more sense.
The only role the government should play in the money system
is to provide the coins the public needs and wants to use, as mandated
by the constitution.

Joe Fischer

What about the distribution costs after that?

Every time a one cent coin travels to and from banks etc. more
distribution cost is added, it could cost a lot more that one cent over
a coin's lifetime. Billy


"Dr. Richard L. Hall" wrote:

"Christian Feldhaus" wrote in message
...
Dr. Richard L. Hall wrote:

Most municipalities within the states can also add taxes.
[some interesting examples snipped]
So it varies widely.

Yes, that is definitely different from the system I am used to. Each of
the 15 EU member states has its own sales tax rates - normally a
standard/full rate, and a reduced rate for certain products. But within,
say, Germany or the Netherlands the rates are the same.

The issue is not whether it's rounded. It's who's going to pay for the
changeover. The proponents of the change say it's going to be free, at
no
cost to the consumer. Experience tells me otherwise.

Well, maybe the situation in the US is or would be quite different from
the one in, say, the Netherlands 20 years ago. Apparently the
production/distribution costs are different, too. For example, five
years ago making a German 1 [2] pf coin cost 2.5 [3.5] pf. And last year
in Finland the production of a 1 ct coin cost about 2 ct according to
the Finnish mint. Don't know if that includes the distribution or not,
but anyway, it is another reason to think, in Europe, about doing away
with those low value coins.

We haven't reached that point yet, at least not according the latest Annual
Report from the U. S. Mint. It costs $0.0089 to make and distribute a cent
coin to the Federal Reserve Banks.

In article .net "Dr. Richard L. Hall" writes:
"Dik T. Winter" wrote in message
...
....
Because there was *no* cost involved in the changeover when the cent was
abolished as a coin. Rather, the merchants had a profit from it.

The merchants made a profit from it but the consumers didn't have to pay for
it. Amazing economics! I wonder where that profit came from?

Yup, isn't it? Check-out handling became faster. How is that for
economics? More efficiency? And there was *no* cost involved.

Yes, so what? What has the abolishment of the cent coin to do with taxing
authorities?

Obviously you don't seem to understand that the U. S. is a much more complex
country than the Netherlands. and the changeover will be much more
complicated here that it was in the Netherlands because of that complexity.
You have a tax added to each item and it is uniform across the country if
you have only one taxing authority. We can't do that here because there are
several hundreds of taxing authorities.

What has that to do with the abolishment of the cent coin?
--
dik t. winter, cwi, kruislaan 413, 1098 sj amsterdam, nederland, +31205924131
home: bovenover 215, 1025 jn amsterdam, nederland; http://www.cwi.nl/~dik/

Joe Fischer wrote:

On Thu, 6 Nov 2003 "Dik T. Winter" wrote:

Joe Fischer writes:
The state sales tax form has no rounding now, and it
has to be filed within 20 days of the end of the quarter,
it presently requires all figures to the cent, and requires
shipping and handling charges be included in sales total,
with actual postage then deductable.
Not only that, the sales tax has to be included also,
then that total has to be divided by 1.06 to get the net sales,
then the sales tax is calculated on the net total.

I thought already that the US sale tax system was stupid. Now I am convinced.

It isn't "the US sales tax system", it is the individual states
that control their own systems.
The size of business activity in the USA is greater than all
the Euro countries combined, and making change with cents is
not a problem at all, there is a small problem with new clerks
when they receive dollar or half-dollar coins, but none with
cents, everybody can count to 5.

A merchant discount is allowed, Walmart must gain
thousands on this, I don't bother with it.

Especially this part. Apparently the US sales tax system favours large
sellers.

It is the same percentage for all, but Walmart has all
the business.

In the EU tax is payed only on the "markup". But each company from producer
to retailer will pay its part. ("value added tax", "mehrwertsteuer",
"taxe value ajouté", "belasting toegevoegde waarde".) And, there are
no discounts.

Sales tax is only paid on markup or value added? There
has been occasional talk of a federal value added tax here, but
I don't think it had much success, taxes are way too high already,
not only on sales, but on other aspects of business.

The cent is the most used coin except for perhaps the
quarter. Being the most used, means the most needed,
and most favored.

It's also the most hoarded. Billy


Joe Fischer