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I was merely showing evidence of how one cent can add up over time which is what the poster that I quoted had said. Gosh who is hard headed here. If one cent doesn't add up over time. Taxes less than one dollar are useless in raising any kind of revenue.

 

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Exactly. I am correct about the taxes though, and have several here who tried to prove me wrong, who later apologized for their mistake.

 

Apparently, your mind is not in one of those states.

 

I won't be joining them.

 

Go to your state's tax department and get a copy of the current rounding laws for sales taxes and see if they are what you were taught.

 

Don't have to. I was in retail for 40 years and know all there is to know about sales and use tax.
I'll tell you once again. If the sales tax works out to less than half of a cent, it's ALWAYS rounded down to the lower cent. If it works out to a half cent or more, it's ALWAYS rounded up to the next higher cent. Do your own homework and study your state's sales tax chart. You'll find my statement to be true. There is absolutely no windfall on either side. How is that so hard for you to understand?

I'm waiting for your apology.

 

Im still in sales and know what the laws are.

 

What state do you live in? I'll do the work and let you know how it comes out.

 

What about the cent/penny debate? I prefer cent, so I corrected Sheldons work. Much better now.

 

Here you go, @Hommer.
In my county, the sales tax rate is 6.5%

6.5% of $0.99 is $0.06430.
This is rounded down to $0.06.

6.5% of $1.01 is $0.06565.
This is rounded up to $0.07.

So, if 2 items are sold, 1 at $0.99 and the other at $1.01 the total sales are $2.00 and the state collects 13 cents. What is half of 13 cents? Miraculously, it's 6 and a half cents. So, no. the state does not make out on the break.

Simple junior high school math shoots huge holes in your argument.
Maybe you should get out of sales.

I'll accept your apology now.

 

If there were no cents for change, you would pay $1.05 and $1.10 for those purchases. That's a total of 15 cents taxes for $ $2.00 Hmmmm simple math.

 

Thanks for the info on the federal tax thing, I'm wrong and you are right. And yes, math was certainly not and still is not one of my strong points. Although I graduated on the honor roll it was math that kept me from high honors. English and History were my best subjects. I was also thinking about the nickel's cost to make and mistakenly used the cent for this point. In the end, I was just trying to make a point about waste, bad decisions to keep making something that does not make a profit, etc. I'm glad to hear the U.S. Mint is making a profit. Now if only the USPS could figure out a way to do the same, we would see some real progress.

 

While you are correct that $1.06 would be rounded down to $1.05, you are incorrect in stating that $1.07 would be rounded to $1.10.
$1.06 and $1.07 would both be rounded to $1.05.
$1.08 and $1.09 would both be rounded to $1.10.
Try to understand what rounding to the NEAREST nickel means.

I swear that this is like trying to teach a pig to sing.

 

Well, um, actually, $1.01 plus $0.07 is $1.08, so he's right that it would get rounded up to $1.10.

It's pointless, though. Yes, you can contrive pairs of numbers that will produce rounding errors in favor of one party or another. Over time and over all transactions, though, things will even out, and no party will come out ahead by any significant amount.

The misleading argument stems from statements like "doing away with one cent and make taxes five cents", as though abolishing the cent would force governments to round tax rates to the nearest nickel. It would do no such thing. For proof, look at all the existing tax rates that specify fractional percentages, even though there is no fractional-cent coin.

 

It is easy to see though where a one cent increase in price can produce three or four. It happens everyday. McDonald's sells billions of Big Macs at the same price, I guarantee they have figured out how to gain a penny instead of losing one, on every sale. Just the public doesn't keep up with it. We are a throw away society and our debt proves it.

 

If I could get everybody in the country to send me 1 cent, 1 time............I'd be very wealthy.

Of course I'd have to figure out a way of disposing of 300+ Million envelopes but I'd be up for the challenge!

 

Littleton sends me a shiny new penny every month. They've been sending them for ten years, ever since I bought a quarter book from them. It's a start.

 

When the rounding question comes up, most folks make comparison's based upon what "individual" item's cost. Kind of like, they're going to check out and pay for each individual item.

"For the First Item out of your cart, we have a can of beans. Beans go for .99 per can. At a tax rate of 6.5%, that'll be $1.05. Will that be cash or credit?"
"Next up, we have a can of Beans. Beans go for .99 per can. At a tax rate of 6.5%, that'll be $1.05. Will that be cash or credit?"
"Next up, we have a frozen TV Dinner. This Frozen TV Dinner goes for $4.99. At a tax rate of 6.5%, that'll be $5.31. Will that be cash or credit?"

IMO, nobody makes out since the rounding occurs on the "Total Bill", not the individual items on the bill.

"Cent Whimsy" makes perfect cents in the cent/penny debate if one were to totally ignore colloquialisms out the door. I say "NEW-CLEE-AR" and Jimmy Carter say "NEW-CUE-LAR". Both are communicated to mean the exact same thing just like the phrases of "not one red cent more" and "for only a few pennies more".

Frankly, those that like to argue the difference can be quite boring. OR perhaps they are "NEW" in their understandings of the difference? (Cocktail Chatter)

 

In my state not everything you purchase has the same tax rate applied to it. It may or may not be different in every state. There is a grocery tax, a beer tax, a unprepared beverage tax (fountain drinks and coffee), a cooked food tax ( deli), a regular state sales tax, a city tax and a county tax. Not all are applied to everything you purchase so the reason each department key on a cash register can and does calculate a different tax for that item. If you take the totals from that dept. ( which are separated on returns) and see that you owe taxes that weren't collected, something is amiss. You research it and realize that your price is just barely below the breaking point to collect another cent that will be owed if you sell 2 of that item. Believe me in a month's time a cent will add up. To remedy the loss you raise the price to just above the breaking point. You gain taxes. Again in a month across all departments, it adds up. Multiply that by a year, you can easily gain a bank note or lose one. What do you think smart business owners do?

 

I'm ready for a snort..........