Law Office of Matthew Konecky - May 2020

GAS PRICES AND THE HIDDEN CENT

The History Behind the 9/10 of a Cent

We’ve all seen it — the 9/10 tacked on at the end of every gas price. We see it, but we don’t really think about it when we pay for our gas. When you see gas advertised for $2.39 at your favorite spot to fill up, the price is really $2.40. There’s a hidden cent. But why is it there? This fraction of a cent is rooted in American history. In 1792, Congress passed the Coinage Act to standardize American currency. As part of the act, fractions of a cent were established. For instance, there was the 1/1,000 of a dollar, which is the equivalent of 1/10 of a cent. This was also called the “mill.” In the early days of America, the mill was a regular part of day-to-day transactions, but it was slowly phased out. It did, however, remain part of various types of utility billing (some electricity companies still use fractions of a cent), tax assessments, and investment stocks.

In 1934, for example, the average price of a gallon of gas was about 16 cents. It was more difficult to raise the price by a cent because people were more sensitive to a one-cent increase at that time. For reference, 16 cents in 1934 is the equivalent of about $3.13 in 2020, when adjusted for inflation. Today, the average cost of a gallon of gas along the I-95 corridor between Miami and Palm Beach Gardens is about $2.49. But unlike in the past, it’s much easier to raise gas prices by a few cents because it makes less of an impact. There’s a psychology to this, as well. In 1934, if you raised the price of gas by 1/10 of a cent, you could market your gas at 16 cents, with the fraction tacked on. At a glance, it looked like nothing had changed. This is the same reason why many items today have prices ending in 99 cents. Most people make buying decisions based on the first number, not what comes after the decimal. Eventually, it became easier for oil companies to raise gas prices and for the federal government to raise taxes on gas as people got accustomed to it. Over time, keeping the 9/10 on gas prices became the norm, and now we’re all used to it, so the hidden cent remains.

In the 1930s, however, the mill became a normal part of gas pricing because of the Revenue Tax Act of 1932, which allowed for a federal excise tax on gas that could be added in fractions of a cent.

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Many other self-driving vehicles function similarly, where you still have to be behind the wheel for the feature to work. The idea behind this is that the human driver can take over if necessary. If there’s an emergency, the driver will be required to take over. If the driver is impaired, this could present a problem. Florida law agrees. This is certainly an area where law enforcement, and the legal system at large, is still trying to understand changing technologies. The technology behind self- driving vehicles is constantly changing and improving. One day some cars will have no steering wheels at all, and courts will have to answer more questions about DUIs. If you’re in a car without a steering wheel, then can you be in physical control? Do you have the capability to operate the vehicle? While you may say no, there might be technology in the car that allows you to take over in an emergency and Florida law might decide that the current DUI laws stand. We’re at an intersection of technology and the law, and we’ll soon find out what’s next.

Cooking With Ashley

SPRINGTIME CACIO E PEPE

Nothing is more comforting than a big bowl of cacio e pepe , which is Italian for cheese and pepper. This dish combines a wholesome flavor profile with fresh, seasonal ingredients to satisfy any craving. Inspired by Eating Well

Ingredients

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6 oz multigrain spaghetti

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1 tsp lemon zest

8 oz fresh asparagus, cut into 1-inch pieces

1/2 cup Parmesan cheese, grated

1/2 tsp black pepper 1 cup baby arugula

1 tbsp olive oil

Directions

1. Heat oven to 425 F. 2. In a large pot, cook spaghetti until al dente. Reserve 1 cup of water before draining and put spaghetti in a covered pot to keep warm. 3. Line a 15x10-inch baking pan with foil and toss in asparagus and olive oil. 4. Cook asparagus for 5–7 minutes and sprinkle with lemon zest. 5. Add 3/4 cup of the reserved water, Parmesan cheese, and pepper to the spaghetti. Stir until creamy. 6. Toss in asparagus and arugula before serving.

–Matthew Konecky

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www.matthewkoneckypa.com

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