No more pennies???

Because as long as banks request cents from the Federal Reserve, and the Fed requests them from the Mint, the Mint has to keep making them. The Mint HAS to make coins to fulfill Fed requests, the Fed does NOT have to order coins to fill bank orders.

There are two ways that the cent could be discontinued for circulation. The Congress could vote to end the authorization for the cent, or the Fed could simply stop ordering them. If Congress says stop that it they are done. If the Fed stopped ordering, but then say five years later ordered them again, the mint would strat making them again. There is precedence for the Fed ending orders and the coin production ending. In 2001 the stopped ordering half dollars. In 2009 they stopped ordering nickels and dimes and the Mint stopped making them. When the Fed ordered them again in 2010 the mint started making them again. If the Fed stops ordering cents we would get rid of the cent without having to have the Congress end them. And since they are still authorized, the mint could still make them for collector sets.

 

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If the sales tax rate is 7%, the tax collected on a 95¢ sale is 7¢ TODAY. Ergo, the sales tax collected by a large chain of stores on a large number of sales at 95¢—say, 1,000,000 every week on average—is $70,000.00. I'm sure that there are plenty of supermarket chains that have at least that many sales in which there is a round-up; Walmart probably has them every day. Retail then reports $950K worth of sales to the various state revenue offices, not $1M, and remits $66,500.00 in sales taxes collected instead of $70K and pockets the difference. In the large chain store I worked in while I was in college, we actually had a formula that accounted for the rounded down number of 94¢ sales to counteract the rounded up ones. I never reported an actual 7% on the forms I filled out weekly for the store I worked in, but always a smaller one. The state never questioned any of our reports.

If the cent is not in use, a retail chain could collect $1.05 instead of $1.02 on a 95¢ sale (@7% sales tax) if the industry is not forbidden from rounding up on all transactions. In this case, I can guess that there isn't a single large chain of stores in the USA that will give back 2¢ tax to each of its customers then report the actual tax collected to the state revenue departments. Imagine how many billions of dollars would be lost in the retail industry every year. Think real world, @Conder101.

 

I do think real world. Your example is true if you only have 1 million transaction each of 95 cents each. But in the real world that doesn't happen. There are purchases of multiple items at one time and of different amounts and prices where sometime the 7% rounding up and sometimes down (and I'm not talking about the final rounding yet just the tax itself rounding to the nearest cent) Then when it comes to the final rounding to the 5 cent how are you going to do that? Real would the cash register does it internally. The program is already built into them and it rounds up or down to the NEAREST 5 cent. If you plan on always rounding up, since the machine doesn't have such a program, your cashier is going to have to look the customer right in the eye and ask for from 1 to 4 cents MORE than the cash register says they owe. How is that going to go over in the real world? Then the cashier has to explain to the customer why it is store policy to charge them more than they are supposed to pay. (Of course they could go to the expense of having a custom program made just for them and installed in their cash registers.) Then they have to do so again with the next customer then the the next and the next etc. I forsee angry customers. And real world a smart competitor uses the round up and down option, ends up with lower prices and takes the first stores customers.