I'd favor a coin for $1 and $2.
Like mentioned before, USA is one of the very few countries that still use $1 and $2 notes.
Notes are far moe expensive in use: they wear out a lot faster so they need to be replaced a lot more often than coins.
In the Netherlands, before the euro was introduced, we used to have a 5 gulden note, but it was demonitized and replaced by a coin. At first, many people thought that would be awkward, but in practice it was much more convenient than the note.
About ditching the cent: someone here said that it would only increase a transaction with up to 4 cents if all was rounded up. Well, that's true, but it will increase EVERY transaction with 1 to 4 cents.
Then the struggle with adding tax....
Ive never been to the USA, but have been to Canada and there they have hte same crazy system that taxes are added at the register and are not already included in the prices. so you walk through the store, you add up the prices and in the end you suddenly have to pay a significant amount more, because tax was added.
That system is forbidden in europe. Prices at product in stores and advertisements must list the actual price you have to pay, including taxes. What's the big deal of not mentionin ng the tax as everybody has to pay it anyway?