I agree with mblase that the difficulties in taking the penny out of circulation outweigh the benefits. You, personally, can remove their hassle from you life fairly easily, though. Whenever you get pennies as change, just drop them in the penny dish on the counter, or, if there's an abundance already there, take a few from it to make your change come out to the nickel. Or, just empty the pennies from your pocket into a jar when you get home, and make a trip to the grociery store every year or so, and use one of those automated coin-tallying machines that charge 5% or whatever, and you can go to the cashier and get real money for it.

This argument also becomes less and less significant as the dominant transactional method becomes an electronic one. I use my debit card for around 75% of the transactions I make today (gas, food, beer, electronics, etc.). About the only thing left that I use cash for is fast food (when's McDonald's going to start taking visa, anyways?), and to buy drugs.

briiiiian: Um, I hate to play devil's advocate here, but the sales tax in your state would remain at 7%. It would just get rounded if you only spent $1 (probably down, making the price $1.05). If you spent $10, your sales tax would bring the price to $10.70, which requires no pennies. Different amounts would round different ways, and it would all equal out to Uncle Sam getting about the same 7% in the end.