by Michelle Armstead
Williamston Post staff writer
The next generation of young Americans may be asking “what is a penny?” just as many ask “what is Pluto?”
On Feb. 4, 2013, the Royal Canadian Mint stopped producing and distributing pennies because it now costs more than a penny to make one; the last Canadian penny was minted in May 2012.
The United States is considering a similar move, evident in two bills proposed in the U.S. Congress that were never approved.
U.S. Rep. Jim Kolbe, R-Arizona, introduced a bill in July 2001 that included rounding, which stated that cash transaction values would be rounded to the nearest five cents.
The bill stated that after a sale the total will be calculated, all discounts or deductions made and sales tax imposed based on the state law. Based on the total, that number would be rounded to the nearest five cents for people paying with cash.
However, transactions where the total amount included two cents or less, payments made through credit card, money order, electronic transfer or other means would have been exempted.
Many local business in Williamston could be affected by the eradication of pennies in the United States.
Jennifer Laughter, a cashier of Dollar Times in Williamston, said that if pennies were to be phased out in the United States, dollar stores would have to raise prices.
“There wouldn’t be as many (customers); they would go to regular stores instead of a dollar store,” Laughter said. “I don’t know, if our taxes went down to 5 percent instead of 6 percent it would be different. It would suck because we’d have to round up to a $1.10 instead of $1.05.”
In 2012, Chipotle Mexican Grill locations across the country were caught rounding their customers’ bills to the nearest nickel.
Ryan Banwell, a bartender at CB’s Bucket Bar and Grill, said that if the United States decided to phase out pennies, rounding would be a “universal thing” that all businesses would have to do.
“I guess we’d have to if there were no more pennies in circulation,” Banwell said. “For a business we’d have to round up; we can’t really round down.”
Daniel Witchell, a tax specialist at H&R Block, said that the state wouldn’t lower its sales tax to keep prices low because it “wouldn’t make sense.”
“Everything would have to be in multiples of five because you can’t have things that cost seven cents or six cents because there would be no way to break it,” he added.
Opponents of the penny said the coin should go out of circulation because it poses health threats.
A radiology journal published by the Radiological Society of North America, Inc. reported that post-1982 zinc-based coins can develop “radiolucent corrosive changes within 24 hours.”
Children and animals who swallow pennies are potentially at risk of ulceration and zinc-related morbidity if one gets lodged in the gastrointestinal tract.
Other opponents say that pennies have a limited utility when it comes to purchasing goods from vending machines or toll booths.
“Pennies end up sitting in jars or are thrown away and are not in circulation,” said Greg Mankiw, economist, on his blog.