S 1525: Common Cents Act
S 1525 in plain English: The Common Cents Act would allow covered amounts totaling $0.01 or $0.02 to be rounded up to $0.05, effectively permitting small transactions to be rounded to the nearest nickel.
Stated purpose
The Common Cents Act directs the U.S. Treasury to stop minting the penny for general circulation and requires that cash transactions be rounded to the nearest five cents when exact change cannot be made.
Key points
- Allows amounts of $0.01 or $0.02 to be rounded up to $0.05 for small transactions.
- Applies to persons seeking to make qualifying small transactions.
Arguments supporters make
- Pennies cost more to produce than they are worth, so stopping production saves taxpayers money and reduces government waste.
- Rounding cash transactions to the nearest nickel speeds up everyday purchases and reduces the hassle of handling small coins for both shoppers and businesses.
- Countries that have already eliminated their lowest-denomination coins found the rounding system to be fair and easy to use, with gains and losses balancing out over many transactions.
Arguments opponents make
- Rounding up on some transactions, even slightly, amounts to a small hidden price increase that falls hardest on lower-income people who rely on cash and make many small purchases.
- Pennies still serve a real purpose in exact pricing, charity collection, and keeping sales tax calculations precise, so eliminating them could create confusion or unintended costs.
- The bill leaves a lot of discretion to sellers, which could allow businesses to structure prices or rounding in ways that consistently favor themselves rather than customers, despite the stated protections.
Tradeoffs
Eliminating the penny reduces government minting costs and simplifies cash transactions, but some consumers—particularly those who pay in cash for everyday items—may end up paying slightly more on certain purchases depending on how rounding falls. The bill also tries to balance flexibility for businesses with protections for consumers and workers, but voluntary rounding rules may be applied unevenly in practice.
Current status in Congress: Passed Senate.
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